Gold Poised to Continue On Its Losing Streak In the New Week

Following a relatively steady opening in the early Asian session this week, Gold (XAU/USD) is starting to see fresh selling signs as bears strive to retest the two-month low at $1849. 

Spot gold ended last week with a fresh August low causing panic for bulls, who have now been intensely weakened. The precious metal is at the mercy of the US dollar (DXY) price dynamics amid the growing economic and political uncertainties, coupled with a resurgence of the deadly Coronavirus disease. 

At press time, the commodity is trading around $1860, a slight recovery from its daily low of $1856. Meanwhile, it appears that USD bulls have regained dominance following last week’s recovery from the prolonged consolidation. 

The greenback built on its recovery in the Asian session today as a result of the increased risk appetite in the global markets, which was triggered by widespread optimism over a strong Chinese economy recovery, following reports of a rise in the country’s industrial profits for the fourth consecutive month now. 

Also, it is expected that talks about the US fiscal stimulus will be renewed this week, which will likely dampen the safe-haven appeal of the dollar. 

Moving on market participants will be repositioning themselves as we head into the first US Presidential election debate and the Non-Farm Payrolls this week. 

Gold (XAU) Value Forecast — September 28

XAU/USD Major Bias: Bearish

Supply Levels: $1876, $1900, and $1923

Demand Levels: $1856, $1849, and $1844

Gold remains heavily under selling pressure as traders continue to flee to riskier assets. In the meantime, the yellow metal is faced with the $1849 demand level. A break below this level opens up the possibility of an $1800 price tag for gold. 

Meanwhile, a new descending channel has emerged on our 4-hour chart, further reinforcing the bearish pressure. 

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