Fundamental analytics

Gold is still constrained in a very narrow range

XAUUSD

Gold is trading near yesterday's intraday highs. The American dollar continues to have a restraining effect on the metal (dollar index + 0.13%). Support is provided by reports of a worsening epidemiological situation in the US and EU, which may lead to tougher quarantine measures and a slowdown in the global economic recovery.

 

The day before, US President Donald Trump admitted that an agreement between Republicans and Democrats on the formation of a new package of stimulus measures is unlikely to be reached before the November 3 elections, since significant disagreements between Republicans and Democrats regarding the volume of the funding program remain.

 

Across the Atlantic, the second wave of the coronavirus pandemic continues to pick up steam. French President Emmanuel Macron will address the nation on Wednesday evening. The country recorded a record number of new cases of the virus on Tuesday. Macron is expected to announce a renewal of national isolation, starting on Thursday.

As domestic demand rebounded in September, China boosted net gold imports to a 6-month high. China remains the largest consumer of gold and other precious metals in the world.

 

During the day on the chart, the situation practically did not change. The price remains in the horizontal channel 1892.00-1930.00. We expect consolidation to continue in a narrow range.

 

· Resistance levels: 1930.00, 1937.00, 1967.00.

 

· Support levels: 1892.00, 1875.00, 1867.00.

 

The main scenario - a consolidation in the range of 1892.00-1930.00.

 

An alternative scenario - a breakdown of support at 1892.00 and a decline to 1875.00.

 

The current fundamental outlook is neutral. We would prefer trading based on the borders of the flat at 1892.00-1930.00.

 

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