Home Forex Market Analysis Forex Signals Gold Upward Channel Supports Buying in Gold – Brace for Buying! 

Gold Upward Channel Supports Buying in Gold – Brace for Buying! 

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The yellow metal prices failed to extend its previous session winning streak and edged lower around $1,919 during the European trading session. However, the broad-based U.S. dollar strength could be considered one of the main reasons behind the yellow-metal fresh selling bias. The gains in the U.S. dollar came into existence after the U.S. House Speaker Pelosi rejected Friday’s proposal from Trump, concerning the coronavirus (COVID-19) aid package worth near $1.8 trillion. 

Besides this, the market risk-on sentiment, backed by the hopes of Trump’s health recovery from the COVID-19 infections, also weighed on the yellow metal price. Subsequently, the logic behind the risk-on market sentiment could also be connected with the vaccine’s positive reports and treatment for the extremely infectious coronavirus. On the contrary, the prevalent rise in the COVID-19 cases from the U.K. and Europe and the no-deal Brexit fears keep challenging the market risk-on sentiment, helping the bullion prices limit its deeper losses. Apart from this, the US-China long-lasting tussle also questions the market sentiment upside momentum, which also caps further downside for the gold. AS of writing, the yellow metal prices are currently trading at 1,921.49 and consolidating in the range between 1,919.20 – 1,933.37.

Even though the U.S. House Speaker Nancy Pelosi refused Friday’s U.S. President Donald Trump’s aid package proposal of $1.8 trillion, the market trading sentiment remains positive, possibly due to the positive reports suggesting that the Trump had fully recovered from his bout with COVID-19. These hopes were further fueled after his physician Sean Conley stating that he is no longer an infection risk. This, in turn, boosted the market trading sentiment and undermined the safe-haven metal prices.

Additionally, the market trading sentiment was supported by the hopes of the coronavirus vaccine. Thus the positive tone surrounding the market trading sentiment was seen as one of the key factors that kept the gold prices under pressure. 

Despite the upbeat market sentiment, the broad-based U.S. dollar succeeded in extending its previous-session gains and took further bids on the day amid the stalled stimulus talk that tends to underpin the U.S. dollar. However, the U.S. dollar gains could be short-lived or temporary as concerns over the economic recovery could be stopped because of the resurgence of coronavirus cases and U.S. post-election uncertainty. Although, the U.S. dollar gains kept the gold prices under pressure, as the price of gold is inversely associated with the U.S. dollar price. 

On the contrary, the worries over the resurgence of the coronavirus pandemic have been destroying the support of the global economic improvement, which holds challenging the market trading sentiment and help the yellow-metal prices to limit its deeper losses. As per the latest report, France reported record 27,000 new cases while German infections are surging by the most since April.

At the US-China front, the long-lasting tussle between the United States and China remain on the cards as both parties continuously using very harsh words for each other. This, in turn, added further questions around the market trading sentiment and became the key portion that held the cap on any additional losses in the safe-haven metal prices.


Daily Support and Resistance

S1 1847.32

S2 1874.78

S3 1887.18

Pivot Point 1902.24

R1 1914.64

R2 1929.7

R3 1957.16

The yellow metal gold has risen sharply to trade at 1,928 marks; however, the neutral candle’s closing beneath 1,932 levels implies mixed inclination among traders. Gold is traded over 1,919 levels, and closing of candles beyond 1,919 mark may induce an upward shift in the market. On the upper side, a breach of 1,932 may drive gold higher towards 1,943 and 1,952 marks. In contrast, a bearish breakout of 1,919 levels may lead the gold price towards 1,907 levels today. Mixed bias prevails due to holidays in the United States. Good luck! 

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