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Gold is constrained in a narrow range

Gold is consolidating in a fairly narrow range, staying close to the 8-year maximums which were set this week.

 

Demand for precious metals remains high due to the risks of the start of the second wave of the pandemic and the worsening situation in the global economy. The restraining factor for gold is USD. In recent days, the dollar index has grown by more than 1%.

 

According to Johns Hopkins University, as of June 26, nearly 9.6 million cases of COVID-19 were reported worldwide. In the United States, a new record of detected diseases per day is set. Local restrictions have been introduced in some areas of Lisbon and Beijing, the Australian state of Victoria and the western regions of Germany. In some grocery stores in Australia a limit on toilet paper has been reintroduced.

 

Recently the US Senate passed a bill that imposes mandatory sanctions on people or companies that support China’s efforts to limit Hong Kong’s autonomy. Investors expect another escalation of the conflict between official Beijing and Washington. This will lead to another outflow of capital from risky assets in favor of protective assets.

 

Despite a local corrective decline, gold retains good opportunities for further growth amid active measures by the Central Bank and governments to increase stimulus measures for the economy.

 

Regarding the chart, the price locally stuck in the flat of 1756.00-1767.00 which can be broken.

 

Resistance Levels: 1767.00, 1780.00, 1800.00;

 

Support Levels: 1756.00, 1745.00, 1723.00.

 

The main scenario - a consolidation in the range of 1756.00-1767.00.

 

An alternative scenario - a breakdown of the resistance at 1756.00 and an increase to 1780.00.

 

The current fundamental outlook is neutral. We would consider longs from the level of 1756.00

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