Forex Signals

Gold Trades Dramatically Bullish Over Risk-off Sentiment – Quick Intraday Outlook! 

The yellow metal gold price continued to extend their previous day’s bullish bias and took some modest offers around the $1,888.93 level—the bullion prices battle Wednesday’s high despite a U-turn from $1,844 post-Fed. However, the modest downtrend in the yellow-metal prices was mainly tied to the optimism surrounding U.S. coronavirus (COVID-19) stimulus and the upbeat Brexit headlines, which kept the market trading sentiment positive and undermined the safe-haven metal prices. 

Furthermore, the upbeat trading sentiment could also be associated with the optimism over a potential vaccine/treatment for the highly infectious coronavirus, which adds further burden around the safe-haven metal. Conversely, the long-lasting coronavirus (COVID-19) woes and the tussle between US-China keep questioning the market risk-on mood, which might give some support to the bullion prices to limit its deeper losses. Elsewhere, the broad-based U.S. dollar weakness could also be considered as one of the key factors that help the bullion prices to limit its deeper losses. The yellow metal prices are currently trading at the 1,888 level and still heading upward. 


Despite the widespread doubts over the global economic recovery from coronavirus (COVID-19), the market trading sentiment remained supportive by optimism over the rollout of vaccines for the highly infectious coronavirus disease. In addition to this, the growing hopes for additional U.S. fiscal stimulus measures also exerted a positive impact on the market trading sentiment, which undermined demand for the safest assets such as the U.S. dollar.

Across the pond, the reason for the risk-on market sentiment could also be attributed to the fresh reports suggesting that the U.S. Congress inched closer to the covid stimulus. It is worth mentioning that the Republicans and Democrats in Congress were reportedly “closing in on” approving a $900 billion stimulus bill on Wednesday, the most positive sign seen in months. Moreover, they are also working to pass a $1.4 trillion spending bill for the fiscal year starting on Oct. 1. by Friday to prevent a government shutdown.

At the USD front, the broad-based U.S. dollar failed to stop its previous day bearish bias. It drew further offers on the day as Fed Chair Jerome Powell passed cautious statements, indicating disinflation pressure while expecting the economy to strengthen in the second half of 2021. Apart from this, the Federal Reserve policymakers conveyed their dovish outlook for the long-term while showing a willingness to supporting the economy until they see “further progress” in employment and inflation. Meanwhile, the risk-on market sentiment also weighed on the U.S. currency. However, the U.S. dollar losses helped the gold prices to deeper its losses as the price of gold is inversely related to the price of the U.S. dollar. The U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped by 0.04% to 90.102 by 9:12 PM ET (2:12 AM GMT).

In contrast to this, the escalating market concerns regarding the continuous rise in new coronavirus cases in the U.S. and Europe keep fueling the doubts over the global economic recovery through imposing new lockdown restrictions on economic and social activity, which keep probing the upbeat market performance and lend some support to the safe-haven yellow metal. Apart from this, the fears of a full-fledged trade/political war between the U.S. and China also challenging the market risk-on mood, which also might help the yellow-metal prices to limit their losses.

Daily Support and Resistance

S1 1827.65

S2 1840.68

S3 1848.13

Pivot Point 1861.27

R1 1868.61

R2 1889.09

R3 1909.10

On the technical side, the precious metal has entered the overbought zone as it’s hitting the resistance level of 1,893 level. Closing of candle below this level is suggesting chances of a selling correction in gold; therefore, we can expect gold to drop until 1,875 level. The MACD and RSI are suggesting strong buying trend in gold, and we should look for buying trades actually, but the metal is overbought, and it should come down a bit before giving us further buying trades. Let’s consider taking buy over 1,880 level today and selling below 1,893 level. Good luck! 


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