In the early European trading session, the yellow metal prices stopped its previous day losing streak and recovered from the $1950-52 region to above $2000 level on the day. However, the bullish sentiment around the bullion was being supported by the broad-based U.S. dollar weakness. As well as, the multiple risk catalysts like US-China ongoing tussle, also triggered the precious metal’s rise on the day. In the meantime, the positive news over a potential COVID-19 vaccine becomes the key factor that capping the further upside for the gold.
At the moment, gold is trading at 2,005.25 and consolidating in the range between 1,980.88 – 2,010.09. Moving on, the traders seem cautious to place any strong bids ahead of the minutes from the U.S. Federal Reserve’s latest policy meeting, which are scheduled to be released on Wednesday.
Be it the failure of the U.S. lawmakers to provide any latest announcement over the coronavirus (COVID-19) relief package or latest penalties on China from the U.S., not to forget the ongoing rise in coronavirus cases; the market traders prefer to invest their money into the safe-haven assets like gold. The US-China tussle turns sour further as Trump keeps increasing the difficulties for the companies of China. As a result of the delayed trade review meet, American diplomats announced punitive measures for Huawei in the latest attack on China.
Also weighed on the market risk sentiment was the failure of the Democrats and Republicans to offer any latest announcement on the coronavirus (COVID-19) relief package amid political differences. Apart from this, the coronavirus concerns also keep challenging the energy traders. The virus fears take the front seats as the global leaders struggle to find any medicine to the deadly virus. Whereas, the ongoing rise in the coronavirus cases in Europe fueling the worries about economic recovery. As per the latest report, the actual coronavirus cases increased to 225,404, with a total of 9,236 deaths so far.
Whereas, the cases increased by 1,390 in Germany on the day against the previous day +738. At the same time, the death losses rose by 4, according to the report of German disease and epidemic control center, Robert Koch Institute (RKI). On the positive side, U.S. markets witnessed a heavenly session during the previous session, as the Nasdaq hit a record high yesterday and the S&P500 coming close to reaching its record high. But Asian stocks were mixed on the day, and the dollar was down as well. However, these positive signs turned out to b a major factor that capped further upside for the gold.
Considering the failure of agreeing on the coronavirus (COVID-19) relief package, the broad-based U.S. dollar was down on the day. However, market investors have stuck over uncertainty over the delayed package. Moreover, the weaker U.S. dollar could also be associated with the ongoing doubt about the U.S. economic recovery amid intensifying coronavirus cases.
The precious metal gold continues to bullish at a 2,008 level. We have already captured one positive and one negative signal in gold. But overall the pic count remains green, which is good for us. For now, gold may find an immediate resistance at 2,009 level, and above this, gold can go after 2,038 level. The RSI and MACD support buying trends while the 50 EMA also suggests bullish bias in the market. Let’s consider taking buy trade over 2,008 resistance level breakout during the U.S. session. Stay tuned to our forex trading signal page; we may enter trade if setup confirms buying. Good luck!