XAU/USD Price Analysis — October 7

Gold (XAU/USD) has refreshed its daily highs around $1898 and is currently trading at $1891 (+0.5%) in the early European session.

The precious metal regained bullishness following reports that US President Donald Trump was willing to give aid to airlines and small businesses. However, charters concerning the European Union’s steel tariff on several Asian countries are starting to contend with the risk-on market mood.

Meanwhile, President Trump has recently rejected the proposed $2 trillion stimulus package, following his return from Walter Reed military hospital. However, the president has proposed a $160 billion collective help. The news helped the S&P Futures pare back its previous losses.

The ongoing rift between the EU and Asia, the ever-increasing worries over the Coronavirus, and the Brexit tensions are the major fundamental factors dictating trading sentiment across markets.

Moving on, the markets’ dynamics will be heavily influenced by updates from Trump—either relating to either his COVID-19 infection or the stimulus—as the markets look for clues. Also, traders will be focused on speeches from US Fed policymakers and the ECB’s Chair Christine Lagarde for additional clues.

Gold (XAU) Value Forecast — October 7

XAU/USD Major Bias: Bullish

Supply Levels: $1917, $1923, and $1939

Demand Levels: $1876, $1849, and $1813

Gold has reacted aggressively to the $1923 resistance, after reaching a $1921 high yesterday. The commodity fell by $45 over a few hours but was strongly supported by the $1876 line.

Currently, the XAU/USD has rebounded from that level and is going to attempt to take the $1923 barrier again. Yesterday’s fall was strongly aided by some fundamental factors (as mentioned in this article), which means scaling the resistance this time should be easy. Meanwhile, gold has to break back into our expanding channel for this to be possible.

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