Gold is pressured due to increased investor optimism regarding global economic recovery. Asian indices reached almost 3-month highs today. Investors hope that large-scale incentive measures and the reduction of social constraints will contribute to a more rapid recovery of the global economy.
Despite the local optimism of the stock market, the prospects for further movement of gold prices remain very uncertain. The risks associated with the start of the second wave of the pandemic, the conflict between the US and China, the weakening USD, as well as the growing civil unrest in the United States significantly limit the development of the downward movement in gold. The market situation may change at any time. If there are signs of increased geopolitical and economic risks, investors may again return to buying gold and other protective assets.
Today, the economic calendar will focus on the number of people employed in the non-agricultural sector from ADP (the indicator largely shapes investors' expectations before the publication of the main labor market report) and data on the PMI of the US non-productive sector from ISM.
The price dropped to around 1725.00. We do not see a special reaction to this level of support. The pressure is increasing, so today we are expecting a breakdown and a decline in quotations to around 1711.00.
Resistance Levels: 1750.00, 1765.00, 1780.00;
Support Levels: 1711.00, 1725.00, 1695.00.
The main scenario - a breakdown of support at the level of 1725.00 and a decline towards 1711.00.
An alternative scenario - a consolidation above 1725.00 and growth in the direction of 1750.00.
The current fundamental outlook is neutral. We consider shorts with very moderate risks from the level of 1730.00.
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