Gold has been constrained in a fairly limited price channel for more than a week, staying close to the new 9-year maximums. High demand for gold is supported by fears related to the spread of a new wave of COVID-19, which could harm the recovery of the global economy. A new round of escalation in relations between the United States and China and the upcoming US presidential elections in the fall are increasing uncertainty in the market. Uncertainty and risks are very high, so investors continue to buy gold despite the fact that since the beginning of the year the asset value has increased by more than 18.5%.
Today gold is showing moderate growth due to multidirectional dynamics of the stock indices and a decline of the USD index (-0.1%).
The EU summit will be the main focus of attention today because it should lead to an agreement between the leaders of European countries on controversial issues related to the formation of a pan-European fund for economic stabilization. The results of this summit may have a very strong impact on EURUSD and gold, respectively, since gold is in a very close inverse correlation with the USD.
In the economic calendar of the United States, it is worth paying attention to the publication of statistics on construction permits issued in June. Experts expect the indicator to grow from 1.216 million to 1.290 million.
The flat with borders at the levels of 1793.00-1820.00 remains relevant on the chart. Now the price is near the lower border of the price channel, therefore, we consider the scenario with an increase in quotations as a priority.
Resistance levels: 1820.00, 1830.00, 1850.00;
Support levels: 1793.00, 1774.00, 1760.00.
The main scenario - growth towards 1820.00.
An alternative scenario - a breakdown of support at 1793.00 and a fall to 1774.00.
The current fundamental outlook is neutral. We would consider longs in the range of 1793.00-1796.00.
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