The safe-haven-metal succeeded in maintaining its overnight gains and still trading near the highest levels since September 2011, $1,820.61, marked the previous day. The gold prices are stuck in a trading range of $1,815.92 to $1,820.90, due to mixed clues. However, the reason for the gains in the bullion could be attributed to the noise surrounding the record surge in the US coronavirus (COVID-19) cases as fear of virus dampened prospects for a swift economic recovery and continued underpinning demand for the safe-haven yellow metal.
The broad-based US dollar weakness triggered by the upbeat market mood also impressed gold bulls and kept the gold prices bullish. At the moment, the yellow metal prices are currently trading at 1,819.90 and consolidating in the range between 1,815.93 - 1,820.24. Elsewhere, the gains in the S&P 500 Futures backed by the hopes of the potential virus vaccine kept a lid on any additional gains in gold prices.
However, the reason behind the upbeat market sentiment could be associated with the hopes for a fiscal rescue package in Europe and the US and progress toward a coronavirus vaccine. Moreover, the risk-on market sentiment was further bolstered by the positive reports about the US's receding pandemic numbers.
The European Union (EU) leaders seemed closer to an agreement late Monday for a possible €1.8 trillion ($2.06 trillion) coronavirus spending package meant to reverse the coronavirus-induced slump in the European economies. This news boosted the risk-on market sentiment and strengthened the bid tone around riskier assets. Additional boost on the risk sentiment derived from negotiations for a second stimulus package in the US, which also exerted pressure on the safe-haven US dollar.
Apart from this, the encouraging data from Oxford University's coronavirus vaccine and CanSino Biologics' drug developed in coordination with China's military research unit also favored the risk-on market sentiment. In the meantime, the intraday positive progress in gold seemed rather unaffected by a modest rebound in the global equity markets. Dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. Traders will keep their focus on the virus updates and news concerning China.\
Daily Support and Resistance
Pivot Point 107.22
By the time of writing this update, the USD/JPY is taking a sharp bearish turn from 107.250 level to 106.900. The pair has formed a symmetric triangle pattern, which is likely to support the USD/JPY pair at 106.800 and resistance at 107.450. The 50 EMA and MACD are both suggesting the selling trend. Typically, the symmetric triangle represents neutral sentiment among traders and, therefore, can break out on either side to continue the trend. So we should keep a closer eye on the USD/JPY breakout pattern to capture a quick buy or sell. Good luck!