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Gold is constrained in a narrow range

Gold is still constrained in a fairly narrow range. At the beginning of a trading week, there are very few important economic and geopolitical news on the market that could have a strong impact on trading. The market was constrained even further due to a long weekend in the USA.


Today, trading activity is gradually returning to the market. Stock markets are traded mainly in the green zone, exerting moderate pressure on gold. Investors respond positively to reports of easing the quarantine measures in many countries and news from Novavax. The biotechnology company plans to present the results of its first clinical trial of a vaccine for COVID-19 in July. Based on these results, Phase 2 trials will take place in several countries at once, including the United States.


Another support factor for gold is the USD dynamics. Since the beginning of the day, the dollar index dipped by more than 0.3%. Usually, gold and the USD index move in opposite directions.


In the economic calendar today it is worth paying attention to the publication of data on the CB consumer confidence index for May and the report on new housing sales in the US for April.


Regarding the chart, it’s worth highlighting the narrow flat of 1725.00-1735.00. As a priority, we consider the scenario with the price breaking down from the flat. In this case, the next targets for the movement will be the levels of 1715.00 and 1695.00.


Resistance Levels: 1735.00, 1750.00, 1765.00;


Support Levels: 1725.00, 1715.00.1695.00.


The main scenario - a breakdown of support at the level of 1725.00 and a decline towards 1715.00.


An alternative scenario - a breakdown of resistance at the level of 1735.00 and an increase towards 1750.00.


The current fundamental outlook is moderately negative. Bearish signals prevail on the chart, so within the daily framework we consider shorts from the level of 1735.00.

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