Gold steadies on virus fears, stimulus bets; Fed meet eyed
· Gold prices steadied on Wednesday as worries over rising cases of COVID-19 and expectations of possible inflation from more stimulus measures underpinned the metal, while investors awaited the U.S. Federal Reserve’s meeting outcome later in the day.
· Spot gold was little changed at $1,957.84 per ounce by 0049 GMT. Prices hit an all-time of $1,980.57 on Tuesday before retreating after investors booked profits and the dollar regained some ground.
· U.S. gold futures rose 0.5% to $1,954.50.
· A Reuters tally showed more than 16.62 million people were infected with COVID-19, including 655,583 deaths. Cases continued to surge in the United States, with four states in the South and West reporting one-day records for virus-related deaths on Tuesday.
· Underscoring the economic impact from the virus, data on Tuesday showed that U.S. consumer confidence fell more than expected in July.
· Market participants are now looking at the U.S. Fed’s two-day policy meeting, which ends on Wednesday.
· Gold tends to gain when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.
· SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.7% to 1,243.12 tonnes on Tuesday.
· Meanwhile, Republicans in the White House and the U.S. Congress were in disarray over their own plan for providing $1 trillion in new coronavirus aid, as negotiations aimed at reaching a compromise bill with Democrats also sputtered.
· Asian equities pulled backed on Wednesday as an impasse in U.S. economic stimulus negotiations pushed global stocks lower.
· Silver dropped 1.1% to $24.31 per ounce, platinum fell 0.1% to $947.29 and palladium slipped 1.1% to $2,259.52.
GOLD bullish: to 2000 & maybe 3000! Technical analysis
After the last bullish signals, after breaking the monthly uprange, we had a real profits on GOLD on the channels this last days.
GOLD TECHNICAL PRICE OUTLOOK: XAU/USD WEEKLY TRADE LEVELS
Initial weekly resistance stands at the 2.618% Fibonacci extension of the late-2015 advance at 1983 – note that a parallel of the 2018 trendline extending off the 2016 highs also converges on this region and further highlights its’ technical significance. A topside breach / close above this threshold is needed to keep the long-bias viable with such a scenario exposing the 200% measured move of the 2016-2019 consolidation breakout at 2032. Initial weekly support rests at the previous record highs at 1920 backed by the 2011 high-week close at 1881. Broader bullish invalidation now raised to 1795.
Bottom line: The gold breakout is underway with the rally now approaching initial topside resistance objectives. From a trading standpoint, the immediate advance may be vulnerable heading into confluence resistance near 1983 a good region to reduce long-exposure / raise protective stops– keep an eye out for downside exhaustion ahead of 1881 IF price is heading higher on this stretch with a breach exposing 2000 and beyond. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.
Reference: CNBC, DailyFX, Trading View
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