The safe-haven-metal prices succeeded in maintaining its strong previous-day bid tone and rose to the all-time high above $1980 level, mainly due to the broad-based US dollar weakness, weighed by the unprecedented Fed’s stimulus, falling real rates into the negative territory and US fiscal deadlock. As of now, the yellow-metal prices failed to hold up its early gains at higher levels and witnessed a quick drop of about $35, as a broad-based US dollar started to recover its earlier deeper losses.
However, the safe-haven metal is still trading near a record high of 1,947 level, supported by the concerns about worsened US-China relations and an increasing number of coronavirus cases, which forced investors to take place in traditional safe-haven assets and eventually provided a strong boost to the commodity. At the moment, the yellow metal prices are currently trading at 1,945.09 and consolidating in the range between 1,933.79 and 1,981.13.
As we already mentioned that the gold prices erased its early-day gains, so the reason could also be associated with the positive tone surrounding the equity market, which was possibly backed by the hopes of a much-awaited fiscal package from the US. The US Senate Majority Leader Mitch McConnell said that the Senate Republicans would shortly introduce a new coronavirus relief program. The optimism over the coronavirus vaccine overshadowed the rising virus concerns and supported the S&P 500 futures.
However, the long-lasting US-China tussle and growing market worries about the ever-increasing number of coronavirus cases kept the investors cautious, which boosted the demand for safe-haven assets. If talking about US-China on-going war, the relationship between the world’s two largest economies (US-China) worsens day by day. China ordered the US to close its office in Chengdu in return of the US earlier move to close china’s office in Houston, which eventually exerted downside pressure on the global risk sentiment. It pushed investors to take a position on traditional safe-haven assets, including gold. Additionally, the fears of a full-fledged tussle between the world’s top two economies picked up further pace amid the US blamed China for the COVID-19 pandemic.
On the technical side, the gold may find resistance at 1,935 level and closing of candles below 1935 can extend selling in the metal. On the lower side, the support stays at 1910 level today.
Entry Price – Sell 1929.02
Stop Loss – 1935.02
Take Profit – 1923.02
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$600/ +$600
Profit & Loss Per Micro Lot = -$60/ +$60
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