XAU / USD updates session lows following bullish US data around $ 1,900

• Gold witnessed some new selling on Thursday amid a strong recovery in USD demand.
• A larger-than-expected drop in initial jobless claims in the United States further sustained the bet.
• Risk appetite could help limit the slide ahead of the Trump-Biden presidential debate.

The gold added to its intraday losses and updated daily lows around the $ 1,902 region in reaction to a larger-than-expected drop in initial weekly US jobless claims.

According to data released by the US Department of Labor (DOL) on Thursday, the number of Americans applying for unemployment insurance for the first time dropped to 787,000 last week. The reading was well below the 860,000 anticipated and the prior month’s reading was also revised down to 842,000 from 898,000 previously reported.

The upbeat post continued to support the strong supply tone surrounding the US dollar, which, in turn, was seen as one of the key factors putting pressure on the dollar-denominated commodity. The XAU / USD erased the positive move from the previous day, although it has still managed to stay just above $ 1,900.

A weaker tone in equity markets extended some support to traditional safe-haven assets. This, coupled with a modest pullback in U.S. Treasury yields, further helped limit deeper losses for the underperforming yellow metal, at least for the time being, justifying some caution to aggressive bearish traders.

Global risk sentiment took a hit on Thursday as optimism about the US fiscal package faded, despite upbeat comments from House Speaker Nancy Pelosi. Speaking to MSNBC on Thursday, Pelosi said the stimulus talks were on the right track and they will soon be ready to write on the stimulus bill.

Pelosi further added that the aid bill could pass in the House before Election Day, although it failed to lift market confidence. Investors appeared unconvinced that the offer could pass through the Senate and doubted the ability of the US Congress to overcome strong opposition from Republicans to a larger stimulus bill.

From a technical perspective, the XAU / USD has now approached a two-week-old ascending trend line support. The bears are likely to wait for a sustained breakout through the aforementioned trend line before positioning for any further depreciation moves. Investors are now looking forward to the final presidential debate between President Trump and his Democratic rival Joe Biden in search of significant business opportunities.