Gold Price Analysis: XAU/USD prints mild gains above $1,780 as risk dwindles


  • Gold prices seesaw inside an area between $1,779.60 and $1,784.70/75.
  • Market sentiment sours amid US-China tussle, virus woes.
  • Upbeat China PMI, cautious mood ahead of the busy US session restrict the moves.

Gold prices rise to $1,784.70, up 0.22% on a day, while heading into the European open on Wednesday. Despite refreshing highs since October 2012 the previous day, the bullion fails to break the range established during the late-US session. Though, the yellow metal stays mildly positive following its biggest run of quarterly gains since 2016.

Ever since China passed the Hong Kong law, the Sino-American tension got a fresh fuel. While the Trump administration proved right on its promises to shun Hong Kong’s special trading status, Beijing threatens to retaliate in the latest update. Not only that, but the dragon nation also raises bars for the US Secretary of State Mike Pompeo, at the United Nations (UN) meeting, in renewing sanctions on Iran. Furthermore, geopolitical tension between Indian and China also offers support to the rush to safety.

In addition to the China-cantered factors, the coronavirus (COVID-19) updates also challenge the earlier risk-on mood. The reason could be traced from Reuters’ headline suggesting the surge in the US cases beyond 40,000 to mark the fifth day of the rise in the previous six. It should also be noted that the pandemic situation in Japan and Australia, not to forget India, also flash red signals.

On the contrary, the US Senate’s extension of the small business loan program through August and the BOJ’s signal for further easing offers a ray of light at the end of the tunnel. Also challenging the pessimism could be the cautious mood at the start of the third quarter (Q3) and ahead of FOMC minutes and the key US data.

Amid all these catalysts, the US 10-year Treasury yields extend the previous day’s recovery towards 0.70% whereas stocks in Asia and the US stock futures print mixed signals as we write.

Considering fewer odds favoring any peace between the world’s top two economies, as well as no sign of abating the virus, the safe-haven can extend its north-run towards $1,800 round-figure. However, US dollar recovery might probe the bulls for the short-term.

Technical analysis

An ascending trend line connecting highs marked in April and May, currently around $1,790 can act as immediate upside barrier ahead of $1,800 threshold. Meanwhile, a rising support line from June 05, at $1,761 now, becomes nearby key support.

Additional important levels

Overview
Today last price 1784.69
Today Daily Change 4.26
Today Daily Change % 0.24%
Today daily open 1780.43
 
Trends
Daily SMA20 1736.34
Daily SMA50 1725.54
Daily SMA100 1672.07
Daily SMA200 1589.35
 
Levels
Previous Daily High 1785.91
Previous Daily Low 1764.7
Previous Weekly High 1779.41
Previous Weekly Low 1742.97
Previous Monthly High 1785.91
Previous Monthly Low 1670.76
Daily Fibonacci 38.2% 1777.81
Daily Fibonacci 61.8% 1772.8
Daily Pivot Point S1 1768.12
Daily Pivot Point S2 1755.8
Daily Pivot Point S3 1746.91
Daily Pivot Point R1 1789.33
Daily Pivot Point R2 1798.22
Daily Pivot Point R3 1810.54

 

 

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