The yellow metal managed to stop its overnight losses and drew some fresh bids around above mid-$1,800 level as the prevalent downbeat market trading sentiment, triggered by the worsening coronavirus (COVID-19) conditions Sino-US tussle, underpinned the safe-haven metal prices. Though, the equity market losses were further bolstered after the Chinese planned to extend the Hong Kong crackdown after the arrests of nearly 50 democrats during last week, which in turn, provided some additional support to the yellow metal prices.
In the meantime, the chatters surrounding that the U.K. is considering to increase hardships for Chinese companies, via tightening laws on imports, which in turn, added further pressure on the market trading sentiment and underpins the precious metal. In contrast to this, the U.S. President-elect Joe Biden’s pledge to announce trillions of dollars in new COVID-19 relief measures keep easing doubts over the global economic fallout, which becomes the key factor that kept the lid on any additional gains in the yellow metal prices. Meanwhile, the jump in global vaccinations could also help the equity market to limit its losses. The yellow metal prices are currently trading at 1,856.94 and consolidating in the range between 1,841.51 – 1,858.30.
The global markets trading sentiment failed to stop its overnight negative performance and remained sour amid Sino-US-UK tensions and growing coronavirus fears. At the COVID-19 front, the number of global cases has exceeded 90.87 million as of Jan. However, approximately 22.6 million cases were only marked in the U.S., with over 22,000 American has died from the virus during the previous week. Considering the current condition of the virus, the authorities from more countries, such as Europe and China, tighter their lockdown measures, which positively impacted the yellow-metal prices.
Besides the virus woes, the reason for the bearish trading sentiment could also be associated with the long-lasting US-China tussle, which is continuously picking pace as the US Trump administration plans more sanctions. On the other side, China has shown its dislike over U.S. interference in matters relating to Hong Kong and Taiwan. In addition to the U.S., the U.K. has also increased hardships for Chinese companies via tightening laws on imports. However, the fears of a full-fledged trade/political war between the U.S., U.K., and China have been weighing on the market trading sentiment and were seen as major factors that kept the gold prices higher.
Entry Price – Buy 1857.14
Stop Loss – 1851.14
Take Profit – 1864.64
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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