Gold Price Analysis: XAU/USD buyers can ignore soft weekly open below $1,775

Gold prices bounce off the intraday low of $1,772.67 to currently around $1,774.22 during the early Monday morning in Asia. The bullion offered a gap-down weekly open of $1,774.45 after closing near $1,776 on Friday. Even so, the precious metal stays near to the multi-year high of $1,789.28 flashed earlier in the month.

Read: What you need to know for the open: Summer lull or a COVID-19 tidal wave of panic-vol?

Bulls and bears keep the fight amid virus woes, geopolitical tension…

Be it the surge in the US coronavirus (COVID-19) cases or the global policymakers’ rush to keep their economies afloat, the pandemic has hit the macro finances so hard that rush to risk-safety increased off-late. Also adding to the market’s risk aversion could be the geopolitical tension between the US and China, as well as Beijing’s tussle with India and some of the developed economies.

As per a Reuters tally, In the first four days of July alone, 15 states have reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed about 130,000. It was also known that Texas registered the record high pandemic figures for the seven days in a row while numbers from Australia, China and Europe have been mildly high. Furthermore, talks of virus vaccine have been taking rounds but fail to cut the strong fears.

US President Donald Trump is still waited to sign the sanctions on diplomats from Beijing, involved in passing the Hong Kong security law. However, the White House official confirmed a few more punitive measures are in the pipeline. It should also be noted that the US recently sent two aircraft carries to the South China sea for exercise as Beijing holds drills. Elsewhere, the tension between India and China continues to grow while Iran continues to flash the early signals of worries.

On the other hand, upbeat employment data from the US, coupled with China’s welcome activity numbers, favor global equity traders despite virus woes. As a result, S&P 500 Futures mark 0.4% gains to 3,127 as we write.

Moving on, the US traders will return to the desk after a long week comprising Friday’s Independence Day holiday, which in turn will make the markets a bit more active today. As a result, June month’s US ISM Non-Manufacturing PMI, expected 49.5 versus 45.4 prior, will have a major audience and could negatively affect the precious metal prices if breaking 50.00 mark.

Technical analysis

A two-day-old falling trend line resistance, currently around $1,776.50, restricts the yellow metal’s immediate upside ahead of fuelling it to the last week’s top, also the highest level since late-2012, around $1,789.28. As a result, an ascending trend line from June 26, at $1,760.60 now, gains the short-term sellers’ attention.