The yellow metal prices succeeded in stopping its previous 3-day losing streak and recovered from monthly lows of $1,764.73 to $1,764.73 level mainly due to the broad-based U.S. dollar weakness, triggered by hopes of more monetary easing measures from the U.S. Federal Reserve. Moreover, the concerns over the economic recovery amid intensifying coronavirus cases also exerted downside pressure on the U.S. dollar, which eventually lend support to the yellow-metal prices as the weaker USD tends to make it cheaper holders of other currencies to purchase the yellow-metal. Across the pond, the mixed market trading sentiment, driven by the negative comments of Fed Chair Jerome Powell and U.S. Treasury Secretary Steve Mnuchin, lend some additional support to the safe-haven metal. In the meantime, the worsening coronavirus (COVID-19) conditions in the U.S. and Europe also keeps the gold prices bullish.
Apart from this, the western tussle with China and uncertainty over the Brexit trade deal also probed the market’s positive performance and contributed to its gains. On the contrary, the optimism over a possible vaccine and treatment for the highly infectious coronavirus keeps challenging the market’s bears, which was seen as one of the key factors that kept the lid on any additional gains in the yellow metal prices. The yellow metal prices are currently trading at 1,786.03 and consolidating in the range between 1,775.87 – 1,788.37.
However, the sentiment around the global markets remains mixed amid stimulus concerns and growing coronavirus fears, as well as the negative comments of the Fed Chair Jerome Powell and U.S. Treasury Secretary Steve Mnuchin also kept the market trading sentiment cautious. It should be noted that the Fed’s Powell and Treasury Secretary Mnuchin both said during Monday’s testimony in front of the Senate Banking Committee that the economy is on the way to recovery but needs additional help to stay on track. In the meantime, Mnuchin urged Congress to use $455 billion from the CARES Act to present the much-needed stimulus to the world’s biggest economy.
Daily Support and Resistance
S1 1735.75
S2 1755.61
S3 1766.35
Pivot Point 1775.48
R1 1786.22
R2 1795.34
R3 1815.21
The precious metal gold is violating the ascending triangle pattern on the four hourly timeframes, extending resistance at the 1,792 level. Over this level, the gold price may head further higher until the 1,818 level; therefore, we have entered the buying trade in gold. Check out the trade plan below.
Entry Price – Buy 1792.46
Stop Loss – 1786.46
Take Profit – 1799.96
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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