Gold rallied during the Asian session on Wednesday due to a weaker dollar, which hit a fresh 1.5-month low. The restraining factor for gold is the situation on the stock markets. Major indices are trading in the green today amid increased prospects for a new stimulus package by the US Congress ahead of the presidential election.
Donald Trump stated on Tuesday that he is ready to sign the bill on additional stimulus measures even if the amount of spending exceeds the previously set level of 1.6 trillion dollars. Nancy Pelosi also positively characterized the progress of the negotiations and expressed hope that an agreement will be reached soon. Today, negotiations between the parties continue, although earlier Pelosi said that the deadline for the completion of negotiations is Tuesday.
On the other side of the Atlantic, investors continue to follow the Brexit negotiations. Recently UK and the EU called on each other for a compromise to save the negotiations, which are now virtually frozen.
There are no events on the economic calendar today that could have a strong impact on gold. The focus of investors' attention will be mainly on geopolitical news. Prospects for further growth of gold will depend on the dynamics of the movement of the dollar index, which has dipped by 0.3% since the beginning of the day.
Regarding the chart, the situation practically did not change during the day. Trades are still held in the horizontal channel 1892.00-1922.00. Now the price has approached the upper border of the flat. In case of a breakdown of this level, we can expect an increase in quotations in the direction of the level of 1937.00.
· Resistance levels: 1922.00, 1937.00, 1967.00.
· Support levels: 1892.00, 1875.00, 1867.00.
The main scenario - a breakdown of the 1922.00 level and an increase to 1937.00.
An alternative scenario - a decline from 1922.00 to 1892.00.
The current fundamental outlook is neutral. We consider longs in the area around the level of 1915.00.