U.S Dollar Limits Gold Price Move Above $1,900/Ounce

Gold prices dropped amid a rigorous presidential debate held in the world’s largest economy. The two leading presidential candidates failed to assured investors on key macro-economic issues, leading to a drawdown in U.S stock futures amid the U.S dollar showing some strength relatively.

Gold futures bears are waiting for a clear breach at the $1,895 support line to affirm their bias, which in turn can give the bears the needed gas in pushing price towards the monthly low around $1,850/ounce.

Sequel to the prevailing price action it should be noted that gold prices breached above the $1,900/ ounce price level on Tuesday, as the U.S dollar dropped momentary-on growing political uncertainty and the anticipated outcome of the US presidential debate held hours ago.

That said, it seems the bulls are exhausted as price rejection patterns form arbitrarily around the $1,900-1904.60/ounce price levels.

The odds for gold bears in the mid-term seem to be credible if the U.S election goes smooth as anticipated, coupled with, the introduction of a COVID-19 vaccine and favorable U.S employment data in October, could further take the bears below the $1,800/ounce price level, as present market indicators show lesser buying pressures in recent weeks amid strong gains recorded on global equities in 2020.

On the flip side, on the long term, odds still favor the precious metal, as growing geopolitical concerns and ongoing US-China tensions suggest uncertainty is an asset that gold traders now readily have abundant at their disposal.

Still, the yellow metal rebound remains constructive while within this near-term formation but the broader outlook remains tilted to the downside within the August drop. From a trading standpoint, look to reduce long-exposure / raise protective stops on a test of the upper parallels