On Monday, the precious metal gold prices failed to manage its early-day sharp gains and slipped from a record high of around $1,988.02. Gold prices fell below $1,988 level to trade modestly at $1,968 level, possibly due to the broad-based U.S. dollar fresh bids in the wake of safe-haven demand. However, the gold prices took round near the record high level.
The gold early-day sharp gains could be associated with the risk-off market sentiment triggered by the geopolitical tension between the U.S. and China. As well as the lack of clarity surrounding the much-awaited U.S. fiscal package also favored the safe-haven gold. Elsewhere, the bullish bias in yellow-metal prices was further bolstered by the coronavirus (COVID-19) woes that have been greatly favoring the market’s rush to risk-safety. Moving on, the gains in the greenback could be short-lived or temporary as the coronavirus continuously increases in the U.S., which faded the hopes for quick U.S. economic recovery. At the moment, the safe-haven-metal prices are currently trading at 1,974.19 and consolidating in the range between 1,969.96 and 1,985.11.
Apart from this, the ever-increasing coronavirus (COVID-19) cases continued to weigh on the investor’s confidence about the economic recovery and kept the trading market depressed, witnessed by the fresh leg down U.S. stocks futures. The number of cases globally almost crossed 17 million, while 4.4 million confirmed cases and more than 150,000 deaths toll in the U.S. individually. Elsewhere, the Australian state of Victoria recorded 429 new coronavirus cases on the day, with 13 death recorded so far. It is worth reporting that there are currently 6,489 active coronavirus cases in Victoria. Among them, 416 are in hospital. Apart from Aussie, Tokyo reported 292 new coronavirus infections so far on the day. Considering the on-going rise of virus cases in Australia, the Victorian Premier Daniel Andrews said that he would announce further business restrictions, which would further fuel concerns over the recovery in oil demand.
Besides, the risk-off market sentiment was further bolstered by the U.S. policymakers’ inability to provide details of the fiscal plan. Although the relief measure expired on Friday, the U.S. Senate members failed to offer any information on the unemployment claims benefit. Meanwhile, the uncertainty over the much-awaited fiscal package remains on the cards, as the Democrats and Republicans are still against each other over the package’s size. The Democrats are willing to offer $3.5 trillion help, while Republicans are not supporting anything more than $1.0 trillion.
Considering the early bearish trend continuation signal in gold, we decided to take a sell trade around 1,969 level to target the 1,963 level today. On the lower side, the gold may support around $1,961 level, and violation of this level can extend the selling trend until $1,945. Check out the trade plan below…
Entry Price – Sell 1969.87
Stop Loss – 1975.87
Take Profit – 1963.87
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$600/ +$600
Profit & Loss Per Micro Lot = -$40/ +$40
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