Good morning guys
Prices of the precious metal, gold, closed at 1,885,236, after reaching a high of 1,902.21 and a low of 1,881.32. Overall, the gold movement remained bearish throughout the day. Despite announcing a daily loss on Wednesday, gold prices ended the third quarter of the year with a 4% gain. The US dollar strengthened again in the market, weighing in on yellow metal prices, but the US dollar index (DXY) was almost unchanged on Wednesday, at 93.92. However, in September it managed to record a gain of 2%. Overall, the U.S. dollar index fell 3.5% in the third quarter, helping gold make profit in the same period.On Wednesday, the U.S. dollar was stable due to a failed U.S. presidential debate on Tuesday. Election candidates, Donald Trump and Joe Biden, they took part in the first of three presidential debates on Tuesday. They discussed issues such as Trump’s leadership, the coronavirus pandemic, taxes, and the U.S. economy, but the debate ended in chaos, and none of the candidates drew a decisive advantage from the debate. The yellow metal, which he was gaining ahead of the hearing, suddenly fell, announcing losses Wednesday after the hearing ended.
Meanwhile, hopes for the next round of U.S. stimulus measures rose on Wednesday, after U.S. House Speaker Nancy Pelosi said an agreement between Democrats and Republicans is possible by the end of this week. Optimism over the U.S. stimulus package was also fueled after U.S. Treasury Secretary Steven Mnuchin said Wednesday that the White House would talk to Democratic opponents in Congress.
Moreover, the latest comments from Federal Reserve Governor Michelle Bowman, on Wednesday, also helped improve the sense of risk. She said the U.S. economic recovery from the coronavirus-induced recession has been uneven, as unemployment levels remain high and the need for further monetary stimulus and fiscal support remains.
Meanwhile, Minneapolis Federal Reserve Bank President Neel Kashkari said the fragmented U.S. economic recovery would continue unless a dramatic change or breakthrough in vaccine development or a dramatic policy change comes sooner than expected. He said the current system is fraught with great, unacceptable risks and that the economic recovery is comparable to a car that needs a new transmission.
In terms of data, gold has been declining due to improved sense of risk from optimistic Chinese economic data released earlier in the day. China’s PMI for manufacturing came above 50, to 51.5, and found that China’s manufacturing sector expanded during September. Furthermore, China’s non-industrial PMI also rose above 50.0, to 55.9, in September, supporting optimism that the economic recovery will be faster than expected.
On the U.S. front, the change in employment in the non-agricultural economy of ADP for September rose to 749 thousand, compared to the expected 650 thousand, supporting the US dollar. At 5:20 p.m. GMT, Chicago’s PMI also climbed above expectations of 52.0, to 62.4, providing strength to the U.S. dollar. At 17:39 GMT, the final GDP data for the quarter showed a decline of -31.4% compared to the projected -31.7%, which increased the US dollar. The announced home sales in August also rose to 8.8% from the expected 3.1% and supported the US dollar. Strong macroeconomic data from the U.S. boosted the greenback, putting pressure on yellow metal prices on Wednesday.
Daily technical level
Resistance support
1.887,74 1.911,74
1.872,27 1.920,27
1.863,74 1.935,74
Turning point: 1,896.27
The precious metal, gold, traded at 1,892 and formed a series of side candles in the hourly range, showing a trading range of 1,900 to 1,886. A bull break at the 1,900 level could spur a purchase to the 1,918 level, along with a support level of 1,863. Let’s look at U.S. data on unemployment claims and PMI for manufacturing to determine a further market trend. Bull bias seems dominant today. Good luck!