Gold hovers above $1,800 as dollar drops despite lingering coronavirus concerns
|- Gold rises 0.30% as the dollar index drops 0.20%.
- The US stock futures rise, keeping the safe-haven US dollar under pressure.
- The US coronavirus cases tally crosses the 3.3 million mark.
Gold is better bid at press time with prices trading above $1,800 per ounce alongside a weak tone in the US dollar, the yellow metal's biggest nemesis.
The greenback is trading in the red despite the continued rise in the number of coronavirus cases in the US and other parts of the world. The US alone recorded 59,747 new infections in the last 24 hours, according to Johns Hopkins University. With that, the total number of cases in the US crossed the 3.3 million mark.
The weakness in the greenback, a preferred safe haven since the beginning of the virus crisis, could be attributed to the uptick in the US stock futures. At press time, the S&P 500 futures are reporting a 0.5% gain, a sign the risk sentiment remains strong and stocks are likely to extend Friday's rally.
Looking forward, the yellow metal is likely to continue tracking the action in the US dollar. The greenback may find bids, if the US corporate earnings season, due to begin this week, reveals bigger-than-expected economic damage in the second quarter, leading to a pullback in the equity markets. In that case, gold may come under pressure.
The losses, however, could be short-lived, as dips my be met with increased haven demand. Also, the Federal Reserve is still buying treasuries at a faster pace. As such, the investment demand for gold is likely to remain high.
Technical levels
The bearish divergence of the MACD histogram and the 14-day relative strength index's downside break of an ascending trendline suggests scope for a pullback. The yellow metal may revisit support at $1,765 (May 18 high) in the short-run. On the higher side, resistance is seen at $1,818 (July 8 high).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.