Despite a decrease in investors' risk appetite gold is pulled down on Friday.
There are two main reasons for the development of the retreat. The first is a partial fixation of long positions at the end of the week after the establishment of a new 8-year high of trading and growth of quotations above the level of $1800. The second is the strengthening of the USD. Gold and other commodity assets are denominated in USD, which means that strong USD increases commodity prices for foreign investors.
The market mood had a negative shift after the latest US COVID-19 related data was released. It appears that about 60.5 thousand new cases were registered in the US. This is a record daily increase value in one country since the discovery of the virus at the end of 2019 in China. It also became known that, following Beijing and Melbourne, Hong Kong has tightened up restricting measures to stop a new outbreak of the virus in the city. Experts predict that a new outbreak of the virus will slow down the recovery of the global economy.
The United States blacklisted one of the top officials of the Chinese Politburo. Investors anticipate growing tension between the two countries.
Considering the circumstances of increasing geopolitical and economic risks in the medium and long term, we can expect further development of the bullish trend for gold. Within the daily framework, gold should remain under moderate pressure and we will see the continuation of the correctional movement.
Regarding the economic calendar today it is worth paying attention to the publication of US data on the producer price index for June.
A pullback movement is developing on the chart. The closest significant support level is located at around 1793.00. Here we can expect reversal signals at lower time intervals. If the bears break this mark, the next target for the price movement will be the level of 1774.00.
Resistance Levels: 1805.00, 1820.00, 1830.00;
Support Levels: 1793.00, 1774.00, 1760.00.
The main scenario - a decline to 1793.00 and further upward movement.
An alternative scenario - a breakdown of support at 1793.00 and a decline to 1774.00.
The current fundamental outlook is neutral. We would consider longs from the level of 1793.00.
Only from November 02nd, 2020, to January 04th, 2021, Deposit Bonus 200% is available for all FortFS clients! Use the advantage to engage for the unique offer within a limited period: activate the deposit bonus and get up to 200% on the deposit amount on your trading account! How to get a Deposit Bonus of […]
Only from 23 to 25 of November, the largest no deposit bonus 100 USD is available for all Forex traders! 🏆 Bonus details: 100 USD maximum withdrawal 75 lots of required trading turnover 2 weeks to try all of the trading conditions Available for cent accounts 📍 How to get the bonus: 1) Register an […]