Gold Price Analysis: XAU/USD refreshes multi-year top past-$1,870, eyes record high of $1,920

Gold prices keep rallying to refresh the multi-year high, currently around $1,874.30 following the uptick to $1,875.22, amid the early Thursday morning in Asia. The bulls are unstoppable near the highest since September 2011 as escalation in the geopolitical tension between the US and China joins the lack of clarity surrounding the US aid package. Also fueling the bullion could be the coronavirus (COVID-19) woes that has been favoring the market’s rush to risk-safety off-late.

The yellow metal buyers are pumping up following the recent news suggesting the extension of the Sino-American tension. As per Axios, the US prosecutors say consulate is harboring Chinese military researcher wanted by FBI. Earlier on Wednesday, the world’s two largest economies warned each other to close respective consulate offices with the US being the first.

Also offering the background music are different signals by the US policymakers over the upcoming fiscal package. Following US Treasury Secretary Steve Mnuchin’s signal of the deal by the end of July, Politico report cited American Senators to defy the claims. Additionally, the actual size of the aid package, estimated around $3.5 trillion by Democrats as opposed to the Republican’s claim of $1.0 trillion, offered an extra dose of uncertainty.

Furthermore, the pandemic numbers from the US and Australia continue to increase with Wednesday’s American addition be above 60,000 while Victoria flashing threats of further rise above daily average, as per The Guardian.

Against this backdrop, Wall Streed offered mild closing after initial gains while the US 10-year treasury yields remain pressured around 0.60%. Further, S&P 500 Futures seesaw near 3,270 following the footsteps of American major indices.

Looking forward, a light calendar, coupled with an off in Japan, will direct the gold traders towards qualitative risk catalysts for immediate direction. As a result, any more worsening in the pandemic and the Sino-American relations, not to forget the increase of uncertainty surrounding the US fiscal plan, will add strength to the yellow metal’s surge.

Technical analysis

While the early month-top near $1,818 offers immediate support to the yellow metal, any downside past-November 2011 peak surrounding $1,800 could exert additional downside pressure. Until then, bulls are ready to challenge the all-time high of $1,921.07 flashed on September 2011.