Gold is trading in the green on Thursday, thanks to lower pressure from the dollar.
The dollar index has fallen in price by 0.2% since the beginning of the day. The pressure on the American currency is exerted by the uncertainty ahead of the US presidential elections and the lack of a decision on the implementation of a new package of economic stimulus measures.
This week, representatives of the FRS have repeatedly noted the need to strengthen government support for the economy in a pandemic. But Republicans and Democrats have yet to agree on the size of the funding program. House vote postponed. US Treasury Secretary Stephen Mnuchin said that the size of the program is 2.2 trillion dollars is unacceptable and he will insist on reducing it to 1.5 trillion dollars.
Additional support for gold could be provided by statements by the head of Moderna, which is developing a vaccine against coronavirus. According to forecasts, in case of successful completion of all tests, a certificate for mass use of the vaccine can be obtained no earlier than March-April next year. Earlier, many experts said that the coronavirus vaccine could be obtained by the end of November this year.
It is obvious that the pandemic will have a strong deterrent effect on the global economy for quite a long time to come. Therefore, demand for gold and other traditional defensive assets will remain high.
On the chart, the bulls continue to storm the 1900.00 level. Now we are seeing the third approach of the price to this level over the last 24 hours. With a high probability, we can expect a breakdown of this mark and the development of an upward movement in the direction of the levels of 1921.00 and 1937.00.
· Resistance levels: 1900.00, 1921.00, 1937.00.
· Support levels: 1885.00, 1875.00, 1853.00.
The main scenario - a breakdown of resistance at 1900.00 and an increase to 1921.00.
An alternative scenario - a consolidation in the range of 1875.00-1900.00.
The current fundamental outlook is moderately positive. We consider longs from the level of 1885.00.