• Gold struggles to move higher in the $1,700s yet fundamentals support the bid.
  • Trade wars, COVID-19 cases on the rise underpin the bullish case.

The price of gold is holding on in the $1,700s by the skin of its teeth within a range of between $1,701.09 and $1,705.47 in Tokyo's open. The risk mood is somewhat balanced but there is a slightly more bearish bias seeping through as the week progresses. 

Trade tensions and Dr. Anthony Fauci saying, "If you think that we have it (COID-19) completely under control, we don't, has seen global equities sink. Some US states that have eased coronavirus restrictions and reopened nonessential businesses have already begun to see an uptick in confirmed cases. This was information that came from the former FDA Commissioner Dr. Scott Gottlieb: 

Dozens of states have lifted restrictions and reopened despite failing to meet certain criteria published by the White House, including two weeks of a sustained drop in new infections.

Dr. Anthony Fauci warned senators on Tuesday that the US faces serious consequences if they open up too quickly, arguing that there will be an inevitable uptick in cases once they relax stay-at-home orders.

My concern that if some areas – cities, states or what have you – jump over those various checkpoints and prematurely open up, without having the capability of being able to respond effectively and efficiently, my concern is we will start to see little spikes that might turn into outbreaks,

– Fauci said in testimony before the Senate Health, Education, Labor and Pensions Committee.

There is a real risk that you will trigger an outbreak that you may not be able to control, which in fact, paradoxically, will set you back, not only leading to some suffering and death that could be avoided but could even set you back on the road to try to get economic recovery,

– Fauci later added.

Trade wars heating up

Earlier in the week, the Global Times tabloid, a paper published by the People's Daily, the official newspaper of China's ruling Communist Party which views are believed at times to reflect those of its leaders, wrote news that stirred the pot. The article stated that unidentified advisers close to the talks have apparently suggested that Chinese officials will revive the possibility of invalidating the trade pact and negotiate a new one. This is a space the markets are watching. 

In response to questions asked whether the US would renegotiate a deal, US President Donald Trump said, "No, not at all. Not even a little bit. I'm not interested. We signed a deal. I had heard that too, they'd like to reopen the trade talk, to make it a better deal for them."

Fed's Powell on the slate

Meanwhile, markets will be looking forward to Federal Reserve's Chairman, Jerome Powell, giving a speech tomorrow on the current issues facing the US economy.

Expectations are that Fed members will push back on the notion of negative rates, which should continue to keep a cap on gold in the near term. Meanwhile, deflationary concerns continue to constrain precious metals, and present another short-term obstacle, with the latest inflation data disappointing expectations,

– analysts at TD Securities explained. "That being said, we expect that when the dust settles, capital will seek to shelter itself from a prolonged period of negative real rates following the pandemic. In this context, we continue to see an elevated hurdle for a significant shift in CTA positioning."

Gold levels

XAU/USD

Overview
Today last price 1702.66
Today Daily Change 0.18
Today Daily Change % 0.01
Today daily open 1702.48
 
Trends
Daily SMA20 1705.31
Daily SMA50 1649.13
Daily SMA100 1608.59
Daily SMA200 1550.42
 
Levels
Previous Daily High 1711.09
Previous Daily Low 1693.76
Previous Weekly High 1723.7
Previous Weekly Low 1682.3
Previous Monthly High 1747.82
Previous Monthly Low 1568.46
Daily Fibonacci 38.2% 1704.47
Daily Fibonacci 61.8% 1700.38
Daily Pivot Point S1 1693.8
Daily Pivot Point S2 1685.11
Daily Pivot Point S3 1676.47
Daily Pivot Point R1 1711.13
Daily Pivot Point R2 1719.77
Daily Pivot Point R3 1728.46

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD holds lower ground near 0.6950 on softer Chinese inflation

AUD/USD holds lower ground near 0.6950 on softer Chinese inflation

AUD/USD is holding lower ground near 0.6950 as sellers keep reins following softer Chinese CPI and PPI data. Markets remain risk-averse ahead of US inflation, which is crucial for the Fed's next rate hike move. 

AUD/USD News

EUR/USD: Fake triangle breakout drags Eurozone bulls to near 1.0200

EUR/USD: Fake triangle breakout drags Eurozone bulls to near 1.0200

The EUR/USD is hovering around Tuesday’s low at 1.0203 and is likely to display a steep fall on its violation. The asset is declining swiftly after facing barricades above 1.0240 and has shifted into bearish territory. In the early Tokyo session, the major has given a downside break of the 1.0209-1.0215 range.

EUR/USD News

Gold bears seeking a critical rally in US yields around CPI

Gold bears seeking a critical rally in US yields around CPI

The gold price is flat in Tokyo as markets await the US inflation data for July that will come out during the New York open. The price has been supported by lower yields and that is supportive because the yellow metal offers no interest. 

Gold News

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

HBAR price shows a drop in volume amidst the current downtrend. Hedera Hashgraph has the potential to rally towards 2000%. Traders should keep the smart contract alternative token on their watchlists and consider a dollar cost average approach for investing. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures