During Monday’s early Asian trading session, the yellow metal prices extended its halt its overnight bearish bias and gathered some pace around above the 1,950 level. The U.S. tech stocks continue to fall, led once again by NASDAQ, which tends to help the gold prices to stay bid. However, the weaker bias around the U.S. dollar was mostly driven by the lack of safe-haven demand. Hence, the market trading sentiment was being supported by the news suggesting the AstraZeneca’s restart of the coronavirus (COVID-19) vaccine trials, after stopping it during the last week. In the meantime, the risk-on sentiment was further bolstered by the comments from the European Central Bank (ECB) policymakers suggesting further easy money days. These positive headlines became the key factor that kept the lid on any further yellow metal gains. The market players did not give any major heed to the Sino-US on-going tussle and Brexit looming worries across the pond.
The yellow metal price is trading at 1,946.49 and consolidating in the range between 1,937.40 – 1,951.72. The market traders seem cautious to place any strong position ahead of the U.S. Federal Reserve’s policy meeting, which is scheduled to take place on Wednesday. Despite the fears of no-deal Brexit and the Sino-American tussle, not to forget the record single-day increase in COVID-19 cases, the market trading sentiment extended its early-day positive tone and remained supportive by the weekend positive headlines suggesting the AstraZeneca’s restart of the coronavirus (COVID-19) vaccine trials. The S&P 500 Futures add 0.73% to 3,347 as of now. Considering the risk-barometers’ positive tone, the market’s safe-haven demand undermined, eventually weighing on safe-haven metal prices.
The reasons for the risk-on market trading sentiment could be attributed to the positive headlines concerning the coronavirus vaccine. The AstraZeneca showed readiness for resuming its vaccine trials after a brief “routine” pause, while the Pfizer is confident about getting the cure of the pandemic by the year’s end. Furthermore, the U.S. Consumer Price Index (CPI) data flashed another positive signal, after the Producer Price Index (PPI), for the Federal Reserve policymakers to meet this week. This exerted an extra positive impact on the market trading sentiment. Moreover, the market trading sentiment was further bolstered by the latest positive report that Libya’s oil industry will reopen after almost 8-months of a stop to exports.
The fears of no-deal Brexit and the Sino-American tussle keep challenging the positive market tone across the ocean, which might help the yellow-metal prices. At the US-China front, the tensions between Sino-US remain on the card amid China’s retaliation to the U.S. sanctions on diplomats. Meanwhile, the looming decision on TikTok also keeps the world’s two largest economies at the slippery track.
At the coronavirus front, the on-going rise in COVID-19 cases globally continues to fuel worries concerning the global economic outlook for the foreseeable future. The World Health Organization (WHO) recorded a record single-day hike in COVID-19 cases by 307,930 in 24 hours. Apart from this, Politico’s news that Iran’s preparing to take revenge for their soldier Qassem Soleimani adds pressure to the market trading sentiment. Furthermore, New Zealand’s extension of lockdown restrictions until September 21 with stricter conditions in Auckland also ap further gains in the equity market. This, in turn, might helps the safe-heaven gold prices.
On the flip side, the news that Tropical Storm Sally is expected to become a hurricane on Monday may affect a region stretching from Morgan City, Louisiana, to Ocean Springs, Mississippi. Thus, these gloomy headlines might support the gold prices by undermining the market trading sentiment. Looking ahead, the market traders will keep their eyes on updates surrounding the Brexit, virus, and US-CHina tussle. Whereas, investors are also looking to the U.S. Federal Reserve’s policy meeting scheduled to take place on Wednesday.
Gold is trading at 1947 mark, meeting the next resistance at 1,950. On the 4 hour chart, XAU/USD has set a double top pattern that’s expected to drive gold prices lower unto 1,942 mark. Overall trading in gold is sideways in between 1,950 to 1,942 mark though, the destruction of this area may drive additional moves. On the higher side, resistance lingers at 1,958 and 1,966 while support lingers at 1,937 level.
Entry Price – Sell 1947.44
Stop Loss – 1953.44
Take Profit – 1939.94
Risk to Reward – 1:1.25
Profit & Loss Per Standard Lot = -$600/ +$750
Profit & Loss Per Micro Lot = -$60/ +$75
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