• Add
    Company

Gold Examines Double Bottom Level - Is It Going to Bounce-Off?  

EagleFX

The safe-haven-metal prices stuck in a trading range of $1,800 to $1,804 and traded with a mild positive bias during the early Asian session. However, the yellow-metal succeeded in regaining positive traction on the day and stayed above the key $1800 mark for the 4th consecutive session. Although, the reason for the gains in the bullion could be attributed to the noise surrounding the record surge in the U.S. coronavirus (COVID-19) cases and the Sino-American tension, which initially favored the risk-off market tone and provided some support to the safe-haven metal.

The broad-based U.S. dollar strength in the wake of the risk-off market sentiment becomes a key factor that kept a check on any additional gains in the gold. At the moment, the yellow metal prices are currently trading at 1,801.15 and consolidating in the range between 1,799.50 and 1,804.71. However, traders were cautious about placing any strong position due to light trading ahead.

The reason behind the downbeat market sentiment could be associated with the growing market worries about the ever-increasing number of coronavirus cases, which fueled the possibility of renewed lockdown and dampened prospects for a sharp V-shaped global economic recovery. Besides this, Hong Kong tightened social distancing measures after Melbourne, to stop the fresh outbreak of the virus in the city.

As per the latest report, the U.S. cases crossed a total of 3.0 million marks and reported over 60,000 cases on Thursday. Moreover, there are over 12.2 million cases and 550,000 deaths globally as of July 10, as per John Hopkins University data. Most of the states like Florida, Texas, and California, reported a record number of new cases on Thursday.

Elsewhere, the yellow-metal gains were further bolstered by the possibility of further stimulus measures from central banks that continued to support the yellow metal. As per the keywords, "These stimulus (measures) are not going away very soon. If we see the global supply chain, it has been massively disrupted, and that disruption adds to inflation as well," It is worth recalling that the $2 trillion worth of current stimulus measures are set to end at the end of July, so investors are looking forward to the U.S. Federal Reserve's next move.

As in result, the broad-based U.S. dollar extended its early-day bullish moves and remained well bid as investors turning to the safe-haven after the U.S. saw a record number of daily COVID-19 cases. However, the gains in the U.S. dollar limited the additional gains in the yellow metal.

However, the gain in the U.S. dollar was further supported by the reports that the U.S. Supreme Court threw out rulings allowing the Democratic-led congressional committees to obtain U.S. President Donald Trump's financial records, as reported by Reuters. Nevertheless, the Supreme Court's ruling still let a New York prosecutor obtain those records.

The ruling blew Trump's battle to keep the details of his finances under wraps and was an unwelcome surprise for re-elections in November.

On the flip side, the market traders failed to cheer the positive report about virus vaccine as Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said on Thursday that he believed that they would have a COVID-19 vaccine by the end of this calendar year or the beginning of 2021. Researchers around the world are developing more than 145 vaccines against coronavirus. Whereas, there are currently 21 vaccines are in human trials as per the New York Times vaccine tracker. In the absence of the major data/events to be released on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum for the gold.


Daily Support and Resistance

S1 1755.35

S2 1781.02

S3 1795.3

Pivot Point 1806.69

R1 1820.97

R2 1832.37

R3 1858.04

Gold has bounced off to trade bullish at 1,807 level after dropping to 1,798 level. Closing of candles above 1,798 level has the potential to drive bullish trend until 1,817 level. The technical indicators like 50 periods EMA and the RSI are in support of bullish trend. The XAU/USD has recently closed a bullish engulfing candle, which is supporting an upward trend in the market. Traders can take buy trade above 1,802 level to target 1,816. Good luck!

EagleFX Review

!"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|} !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}