Chart of The Day XAUUSD (Gold)

XAUUSD Potential Reversal Zone & Probable Price Path

The President of the United States initiated the transition process, and the market's willingness to take risks continued. Risky currencies improved significantly, and the US dollar index closed down 0.3% to 92.2, which was a new low since the end of August. U.S. stocks hit a new high, the Dow broke through the 30,000 mark for the first time, and the U.S. 10-year Treasury bond yield rose by more than 2 basis points to close at 0.88% President-elect Biden of the United States continues to announce the list of his cabinet members, and will nominate Blincol, the chief diplomatic adviser of the campaign team, as secretary of state and senior policy adviser Sullivan as national security adviser. In addition, Pennsylvania and Nevada confirmed the result of Biden’s victory. In November, the US research consumer confidence index for the world's large companies dropped from 101.4 to a three-month low of 96.1, which was worse than market expectations of 98, reflecting the impact of the epidemic on consumer sentiment. International Monetary Fund President Georgieva said that the collapse of economic activity caused by the coronavirus epidemic has put the central bank under pressure to provide more interest rate cuts and easing policies, but additional monetary stimulus measures may pose a major risk to financial stability. Local governments need to continue to maintain fiscal measures to support economic recovery

From a technical and trading perspective, Gold took a heavy beating yesterday, tumbling 4.5% to $1863.04/oz, after it had traded close to a two-month high of $1960.44/oz during early Asian hours yesterday. If the vaccine development continues to show progress, expectations of further monetary and fiscal stimulus will begin to ebb and that may pressure gold downwards. Note also that positioning remains stretched and elevated on the long side of the market according to IMM data.. As such bearish exposure is now warranted on a breach of yesterday's lows, targeting the downside equality objective versus the 1966 swing high at 1740, using a protective stop just above today's high to enhance the risk reward ratio of this potential opportunity” (posted on the blog two weeks ago) …..UPDATE: price has declined to the initial target zone of 1825/07 with the confluence of the equality objective versus the 2016 swing high and the symmetry swing support versus the March correction. Bears should look to cover half their positions here and move protective stops to entry to protect profits. It is possible that from current levels we could see a snap back to test prior support support as resistance in the 1860/90 area before making another leg lower to test the primary downside objective at 1740/60

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