Gold price continues the consolidation phase for the fifth consecutive session amid mixed signals from the coronavirus front and the rebound in risky assets. Gold price continues to find support at the 50-day moving average but looks unable to bounce higher.
A rising number of new coronavirus infections support the precious metal. However, robust economic data from USA such as better than expected retail sales and speculation of a new relief package up to one trillion from U.S. government boost investors sentiment that the economic recovery will take shape.
Fed chairman warned of high uncertainty on the duration of the coronavirus recession, but he also reiterated the banks promise to do whatever it takes to support the economy.
Silver also is trading in a narrow trading range around 17.5 while the gold/silver ratio has stabilized at 98.08.
Gold price is 0.04% higher at 1,726 at the highs of the recent consolidation range. Many traders wait for a breakout from the current consolidation phase to initiate a trading position. The long term outlook remains bullish as long as the gold price trades above the 50-day moving average.
On the upside, initial resistance stands at 1,737 the daily top (higher high). If the gold price breaks above 1,737, then the next resistance would be met at 1,745 the high form June 11. Next supply zone stands at 1,765 the high from May 18.
On the flip side, the first support for gold price stands at 1,731 the daily low, while more buying interest might emerge at 1,714 the 50-day SMA. In case the bears continue the selling pressure, then the next support area stands at 1,692 the low from June 9.