MTS Help Center

· Gold rose on Friday to trade below a three-week high reached in the previous session, as cracks widened in Sino-U.S. relations and investors worried a recovery from coronavirus-induced economic slump would be slower than expected.

Spot gold gained 0.2% to $1,732.01 per ounce by 0349 GMT, having hit its highest since April 23 at $1,735.96 on Thursday. U.S. gold futures rose 0.1% to $1,742.60.

· "It's been clear, as more economic data is released, that some of the damage that has been done (to the global economy) would take much longer to repair than expected," said Michael McCarthy, chief strategist at CMC Markets.

It is becoming increasingly apparent that a snap-back or a V-shaped economic recovery is very unlikely, McCarthy said, adding that this meant interest rates would stay low for longer, adding to the appeal for gold.

Non-yielding bullion tends to gain in a low-interest environment and when economic uncertainties rise.

· An already-dismal near-term U.S. economic outlook has darkened further, a Reuters survey showed. While a recovery is still forecast in the second half of the year, it won't come close to regaining the ground it lost this year.

British manufacturers also think it will take longer to recover from the economic impact of COVID-19 than just a couple of weeks ago, according to an industry survey.

· Gold has gained 1.8% so far this week, which could be its biggest in three weeks, supported by signs of prolonged economic weakness and as tensions between the United States and China flared up.

U.S. President Donald Trump said on Thursday the pandemic had cast a pall over his January trade deal with China, and suggested he could even cut ties with Beijing.

· "Markets are very concerned... Any turning up of the heat between these two nations could be bad news for everyone but good news for gold," McCarthy said.

· Reflecting investor sentiment, SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, rose 1.15% to 1,104.72 tonnes on Thursday.

· Gold Price Analysis: Eases from monthly rising channel resistance, above $1,700

Gold prices retreat from multiday high to $1,731 ahead of the Tokyo open during Friday’s Asian session. Even so, the monthly ascending trend channel and a sustained break of the one-month-old falling trend line, coupled with bullish MACD, keep the traders positive.

As a result, fresh buying can take place beyond the channel’s resistance line of $1,737, which in turn will target April top near $1,748.

Though, the metal’s ability to successfully trade beyond $1,748 enables it to challenge the year 2012 top close to $1,796/97.

Meanwhile, the resistance-turned-support line near $1,720 gains the intraday sellers’ attention ahead of the said channel’s lower line, at $1,700 now.

In a case where the bullion prices slip below $1,700, 200-bar SMA near $1,686 can question the bears.

· Gold Price Prediction – Prices Break out and Close at 7.5-Year Highs

Technical Analysis

Gold prices broke out above trend line resistance and closed the session at a fresh 7.5 year high. The next level of target resistance is the April intra-day highs at $1,747. A close above this level would target the October 2012 highs at $1,795. Support on the yellow metal is seen near the breakout level at $1,716 and then the 20-day moving average at $1,706.

Short-term momentum on gold prices has turned positive as the fast stochastic generated a crossover buy signal. The signal was in the middle of the neutral range and reflects accelerating positive momentum. Medium-term momentum is turning positive as the MACD (moving average convergence divergence) index is poised to generate a crossover buy signal. The MACD histogram is fast approaching the zero-index level which would also be a crossover buy signal. The MACD histogram has an upward sloping trajectory which points to higher prices.

· Among other precious metals, palladium gained 0.5% to $1,843.19 an ounce, but was on track to post its seventh straight weekly drop.

Platinum eased 0.1% to $767.58 per ounce. Silver rose 1.2% to $16.06/ounce, and was set to mark its largest weekly gain in five.