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Gold Bullish Bias Continues - Three White Soldiers In Play! 

EagleFX

The safe-haven-metal prices failed to extend its previous session bullish move towards the $1,800 level and went into consolidation phase between the low of $1,780 and the high of $1,784 while represented 0.55% gains on the day. However, the reason for the directionless gold prices could be attributed to the mixed sentiment in the market triggered by multiple factors. On the other hand, the upticks in broad-based U.S. dollar turned out to be one of the major events that kept a lid on any additional gains in the yellow-metal, at least for now.

At the press time, the yellow-metal prices were last seen trading at 1,784.03 and consolidating within the 1,780.38 - 1,784.58 range. It should be noted that the gold prices were surged to its highest level since October 2012 at $1,786 during the previous trading session.

However, the upbeat trading sentiment was backed by the firm U.S. housing data and signs of a recovery in Europe's economy as well as the upbeat Chinese factory activity with the Caixin/Markit manufacturing PMI rising to 51.2 compared with expectations for 50.7 also exerted some positive impact on the risk tone in the market. Apart from this, the reason for the upbeat trading sentiment could also be associated with the hopes of another stimulus from U.S. Treasury Secretary Steve Mnuchin and signals of more efforts to provide the vaccine although the risk-on market sentiment turned out to be one of the key factors that kept the prices of gold within the confined range.

As of now, the fears of the coronavirus (COVID-19) wave 2.0 triggered by the Reuters' headline which showed that the U.S. coronavirus cases increased by more than 40,000 on Tuesday in major states, such as Florida and California which gradually overshadowed the prospects for a sharp V-shaped global economic recovery and exerted downside pressure on risk sentiment.

On the other hand, the gloomy trading sentiment was further bolstered by the intensified US-China tussle. The U.S. suspended special treatment for Hong Kong after China passed the Hong Kong security law. As in result, the Dragon Nation also opposed the Trump administration's efforts to keep the unilateral sanctions on Iran, which added strength to the pessimistic market sentiment.


Daily Support and Resistance

S1 1710.82

S2 1737.61

S3 1754.39

Pivot Point 1764.39

R1 1781.17

R2 1791.18

R3 1817.96

On the technical front, the gold is likely to go after 1,788 level at first, and then the violation of this could drive more buying until 1,799 level. On the 4 hour chart, three white soldiers are expected to drive more buying in gold. The RSI is also supporting bullish bias along with the 50 EMA. On the lower side, support stays at 1,777 level for now. Let's look for buying trades around 1,786 level to target 1,790 and 1,796. Good luck!

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