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Gold Slips Below Double Top - Eyes on 50 EMA Support! 

EagleFX

The safe-haven-metal prices extended its previous day winning streak and hit the multi-year high around $1,787, mainly due to the risk-off market sentiment. The risk sentiment was backed by the heightened concerns over a second economic lockdown in the U.S. due to the surging number of confirmed coronavirus cases.

At the coronavirus front, the on-going rise in the ratio of hospitalized people in Texas and California, as well as the total number of U.S. cases, crossing the 2.9 million figure and deaths closing in on 130,000 reported yesterday, eventually exerted downside influence on the risk sentiment and contributed support to the safe-haven assets.

As per the latest report, Texas cases rose 2.7% v 7-Day Avg. 4.0%, while Texas hospitalizations rose 517 to record 8,698. In the meantime, Florida cases rose 3.2% v 7-Day Avg. 5.1% and California cases rose by record 11,529. However, the intensified concerns over a second economic lockdown in the U.S. caused risk-off flows to continue to dominate the trading markets.

Moreover, the reason for the risk-off market sentiment could also be attributed to the on-going geopolitical concerns. The tension between the United States and China remained on the card, as well as China's fight with India, and some of the advanced economies also weighed on the risk sentiment and gave some support to the yellow-metal traders.

The risk sentiment was mildly supported by the reports that the stocks in China rose after hints of further stimulus and positive response about the virus vaccine. As well as, the hopes of a sharp V-shaped global economic recovery might keep a lid on any additional losses in the financial market.

At the US-China front, the U.S. Chamber of Commerce and over 40 trade associations urged China to increase its purchases of U.S. goods and services, as agreed under the Phase 1 trade deal signed by the world's two largest economies. That could fuel on-going tension between the world's biggest economies. As in result, the U.S. 10-year Treasury yields dropped one basis point (bp) to 0.67% while Australia's ASX 50 follows Chinese stocks to flash 0.50% gains. Additionally, the S&P 500 Futures trimmed the early-day gains to print 0.30% loss by the press time.

At the USD front, the broad-based U.S. dollar succeeded in stopping its previous day losses. It rose sharply from the session's low mainly due to renewed safe-haven demand on fears of the second wave as coronavirus cases continued to mount. However, the upticks in the U.S. dollar played a role to cap additional gains in the gold prices as they both have a negative correlation. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.04% to 96.718 by 12:34 AM ET (5:34 AM GMT).


Daily Support and Resistance

S1 1749.18

S2 1765.01

S3 1774.46

Pivot Point 1780.84

R1 1790.29

R2 1796.66

R3 1812.49

Looking forward, the market traders will keep their eyes on the trade/virus updates for near-term direction. In the absence of any major data/event, the global markets may witness a dull trading session ahead. On the 4 hour timeframe, the yellow metal gold has formed a tweezers top pattern, which is now suggesting odds of selling bias until 1,770 level. A bearish breakout of 1,770 level can extend selling until 1,759 level. However, the closing of candles above 1,770 level can trigger a bullish reversal in gold. Good luck!

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