Home Forex Market Analysis Forex Signals Gold’s Choppy Session Continues – Traders Eye on U.S. GDP! 

Gold’s Choppy Session Continues – Traders Eye on U.S. GDP! 

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The safe-haven-metal prices flashed green and drew bids around the $1,766 level, mainly due to the risk-off market sentiment backed by the Virus fears, trade war, and many more, which eventually underpinned the safe-haven demand in the market and contributed to the gold gains. As a result of high safe-haven demand, the broad-based U.S. dollar climbed from the previous session low as Jump in Covid-19 Cases Boosted Safe-Haven Demand, which becomes one of the main thing that kept a lid on any additional profits in the gold prices. At the press time, the yellow metal prices are currently trading at 1,763.20 and consolidating in the range between 1,755.49 and 1,766.12.

At the coronavirus front, the on-going increase in the ratio of hospitalized peoples in Texas and California as well as the rising figures of coronavirus cases in Florida fueled the fears of the second wave and considered as a news epicenter of the coronavirus (COVID-19) across the world which eventually put downside pressure on the risk sentiment and provided support to the safe-haven assets. As per the latest report, the U.S. had the most massive single-day total of new COVID-19 cases on Wednesday, with over 36,000 figures.

Moreover, the reason for the risk-off market sentiment could also be attributed to the fresh geopolitical concerns. The Trump administration recently exhabit a willingness to impose new tariffs of $3.1 billion EU/UK goods. As in result, the European Union has criticized U.S. warnings to hit $3.1bn of European products while complaining that this tariff would further harm the E.U. companies, which were already damaged from Covid-19, which eventually added strength to the risk-off market sentiment.

Apart from this, Trump has ordered U.S. Trade Representative to keep check whether China is buying U.S. lobsters under the phase 1 trade deal. As well as, he also warned to impose reciprocal tariffs on China, which also weighed on the risk-tone sentiment. Elsewhere, the US-China trade deal still not showing any progress, which offered an extra burden on the risk-tone.

The risk-off market sentiment was further bolstered by the statement of the U.S. Federal Bureau of Investigation (FBI) Director Christopher Wray that China was the most comprehensive threat to the United States, in consideration of the cyber-theft, coronavirus mishandling, etc.

As we all well aware that the coronavirus outbreak hit the global consumption deeper than expected. As in result, the International Monetary Fund IMF (Washington based institute) expected the global economy to shrink by 5.0% in 2020 versus the April month forecast of 3.0%. Whereas, the key organization also showed the need for further policy measures to control the virus.

As in result, the U.S. 10-year Treasury yields drop to 0.674% while stocks in Japan and Australia also flashed losses at the press time. It’s worth mentioning that markets in China and Hong Kong are off today.

At the USD front, the broad-based U.S. dollar extended its overnight gains and rose sharply from the session’s low mainly due to renewed safe-haven demand on fears of the second wave as coronavirus cases continue to mount. Looking forward, the market participant will keep their eyes on the trade/virus updates for near-term direction.

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Daily Support and Resistance

S1 1696.96

S2 1717.81

S3 1730.63

Pivot Point 1738.66

R1 1751.48

R2 1759.51

R3 1780.36

Gold is trading sideways in a tight trading range of 1,765 – 1,758 level, and it’s currently trading at 1,760 level, holding right over a subsequent support level of 1,758. Above this, the precious metal gold can drive the XAU/USD prices towards 1,773 and 1,778 while support extends to endure nearby 1,750 and 1,753. A bearish breakout of 1,758 can help us capture a quick sell trade in gold today. Again it all depends upon the U.S. GDP and Jobless Claims data. Good luck! 

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