Gold holds steady as virus concerns counter positive China data
· Gold prices held steady near a nine-year peak on Thursday, as concerns over rising coronavirus cases and simmering U.S.-China tensions offset some silver linings from Chinese economic data.
Spot gold crept 0.1% lower at $1,808.97 per ounce by 0341 GMT but moved in a very tight range of about $5, just $8.74 shy of its highest since September 2011, at $1,817.71, hit last week.
U.S. gold futures were mostly unchanged at $1,814.20.
· China’s economy grew 3.2% in the second-quarter from a year earlier, data showed on Thursday, recovering from a record contraction as lockdown measures ended and policymakers stepped up stimulus.
But separate data showed that while the country’s industrial output beat expectations in June, retail sales unexpectedly fell again, pointing to waning consumer demand.
Michael McCarthy, chief strategist at CMC Markets said the data was mixed out of China and gold’s elevated levels reflect ongoing concern from some segments of investors about the growth outlook for the rest of the year.
The positive readings from China failed to help risk sentiment, which was overshadowed by a growing Sino-U.S. rift over the control of advanced technologies and civil liberties in Hong Kong.
Safe-haven gold has risen over 19% so far this year, also benefiting from low interest rates and widespread stimulus as it’s seen as a hedge against inflation and currency debasement, although market participants were still divided on the outlook for inflation.
· Investor focus now shifts to European Central Bank policy decisions at 1145 GMT.
· Gold Price Forecast – Gold Markets Pull BackGold markets tried to rally on Wednesday but gave back quite a bit of the gains to form a slightly negative candlestick. We are sitting on top of major support.
Gold markets initially rally during the trading session on Wednesday but gave back the gains to show signs of weakness. The gold markets have been struggling over the last week or so, as we had broken through a major resistance barrier, but still find plenty of sellers out there. Remember, gold can either be used as a safety play or it can be used as a way to trade against the US dollar. Right now, there seems to be a lot of “risk on” out there, so that has work against the value of gold somewhat. However, the US dollar has been falling so it helps the idea of this market levitating.
I think that there are plenty of support areas underneath, and not the least of which of course will be the level. Underneath there, the level should be massive support as well, as it also features the day EMA as well as being a “midcentury mark.” At this point, I think this still remains to be a bit of a “buy on the dips” type of market, as we are still very much in an uptrend despite the fact that the last week has been very messy.$1800$175050
If we can break above the highs of the last couple of days though, then I think we go looking towards the $level, an area that is also a “midcentury mark.” Longer-term I believe that this market goes looking towards the $level but that is going to take some time to happen and obviously some type of bigger catalyst. 1850 2000
· Elsewhere, palladium was steady at $1,980.94 per ounce, while platinum lost 1% to $824.13 and silver fell 0.6% to $19.28.
Reference: CNBC, FXEmpire
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