Gold Price Analysis: XAU/USD unable to find support, drops to test September lows near $1850

• XAU/USD heads for lowest close in months, worst day since August.
• US dollar extends gains versus majors, trims losses against commodity and emerging market currencies.

Gold is falling sharply on Monday amid risk appetite following the report that Pfizer’s vaccine was more than 90% effective. The yellow is down by almost 5% trading at the lowest since late September.

Earlier on Monday, it traded above $1960. From the top, it fell more than a hundred dollar and is about to test the September low that stands at $1847. A break lower would deteriorate further the technical outlook for XAU/USD.

Initially, gold started to decline on risk appetite following the vaccine announcement. Now the downside gained strength amid higher US bond yields and a recovery of the US dollar across the board. The DXY is approaching 93.00, after bouncing from monthly lows. In Wall Street, the Dow Jones is up by 3.75%, off highs.

The decline in gold is the biggest since August 11 and it could post the lowest daily close since July. The dramatic turn reflects the rapid change in the market’s attention from US elections to the vaccine.