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PRECIOUS-Gold firms on coronavirus woes, U.S. stimulus hopes

· Gold prices rose on Monday underpinned by concerns of a worsening COVID-19 pandemic, while hopes for a new U.S. stimulus package before the November presidential election also supported prices of the precious metal.

· Spot gold XAU= gained 0.6% to $1,909.90 per ounce by 0725 GMT, while U.S. gold futures GCv1 were up 0.3% at $1,912.40.

· "The resurgence of COVID-19 in Europe has increased the possibility of a double dip recession and a protracted economic slowdown," said Harshal Barot, a senior research consultant for South Asia at Metals Focus.

· "Slowing economic growth will mean that we would see more monetary and fiscal stimulus down the line."

· Worldwide coronavirus cases crossed 40 million on Monday, according to a Reuters tally, while much of Europe enacts new restrictions to curb the outbreak. expect gold to trade cautiously around $1,900 level for now, the game changer being whether we can get (U.S) fiscal stimulus in the next 48 hours," said Howie Lee, an economist at OCBC Bank.

· U.S. House Speaker Nancy Pelosi said on Sunday that differences remained with the Trump administration on a wide-ranging relief package but that she was optimistic legislation could be pushed through before Election Day. she acknowledged an agreement would have to come within 48 hours for that to happen.

· Gold Price Analysis: XAU/USD challenges critical $1907 barrier, levels to watch – Confluence Detector

The Technical Confluences Indicator shows that the yellow metal remains capped below a major upside barrier at $1904, which is the convergence of the previous high four-hour, Fibonacci 38.2% one-month and SMA200 one-hour.

The XAU bulls need to recapture the next critical level at $1907 (SMA5 one-day) to unleash the further upside, beyond which the $1910 (Bollinger Band one-hour Upper) level will get tested.

The next target for the buyers is aligned at $1915, the intersection of the Fibonacci 61.8% one-week and SMA200 four-hour.

Alternatively, sellers aim for $1897, where the previous day low coincides with the SMA100 on four-hour.

The next significant cushioned is placed at $1894, the confluence of the Fibonacci 23.6% one-week and pivot point one-day S1.

A sharp sell-off could be triggered below the latter, opening floors for a test of $1883, powerful support comprising of the previous week low and Fibonacci 23.6% one-month.

· Elsewhere, silver XAG= climbed 2.4% to $24.74, having hit a near one-week peak.

· Citi in a note said it expects silver prices to rally to $40 over the next 12 months, on the back of sustained investor demand and a recovery in industrial consumption during 2021. XPT= rose 1.2% to $870.69 per ounce and palladium XPD= was 0.9% higher at $2,351.94.

Reference: FXStreet, Investing