- Gold bulls extend control above 1730 levels.
- Flight to safety amid escalation in US-China tensions boosts gold.
- Gold on track for a weekly decline, despite hitting 7-year tops.
The recovery in Gold prices (XAU/USD) from Thursday’s troughs of 1717.34 regained traction above the 1730 mark in European trading, following a brief consolidative stint in Asia.
The fresh leg higher in the yellow metal is mainly driven by the European traders’ reaction to the escalation in the US-China tensions, in the face of Beijing taking ‘forceful measures’ on Hong Kong under the National Security bill.
The deepening concerns prompted a fresh flight to safety wave and lifted the ultimate safe-haven back on the 1730 barrier. The spot now trades with 0.44% gains at 1735.56, although remains on track to book a weekly loss.
The weekly decline could be likely associated with the increased expectations of a global economic upturn, as some countries relaxed lockdown restrictions. Meanwhile, the US dollar continued to draw the haven demand on the back of the US-China row and fading optimism over the anti-coronavirus vaccine that weighed heavily on the global stocks.
Looking ahead, the US dollar price action and risk trends will continue to influence the gold trades while the near-term sentiment around the metal will likely remain underpinned by the massive stimulus announced globally to combat the virus impact.
Gold: Technical levels to watch
With the renewed uptick, the next resistances are aligned at 1740 (round number), 1749.14 (May 21 high) and 1765.38 (7-year high). To the downside, immediate support is seen at 1716.31 (21-DMA). A break below which the 1700 mark will be tested.
Gold: Additional levels
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.