Gold Price Looking For Direction Below The Yearly Highs

Gold investors continue to be optimistic as the number of new infections continues to rise in the USA. The recent shift to risky assets after the better than expected economic data from the USA, China and Europe during the week improved sentiment and gold met some selling pressure, but buyers continue to buy the dips. On Tuesday the precious metal hit the yearly highs but failed to keep higher.

Gold investors are focusing on the developments in the coronavirus front. Yesterday, the U.S. announced more than 55,000 new coronavirus infections, the largest daily increase any country has ever reported. Texas announced yesterday that is mandatory to wear masks in all counties amid the rising number of infections.

Many countries and U.S. states are imposing local restrictive, and that supports my view that country lockdowns may not take place. The risk is that this situation could change soon if the coronavirus new cases increase further.

Overall, the coronavirus risk is supportive for gold, but If the rebound in equities continues, we might experience a pullback in the gold price as investors might take some gains off the table.

Gold Technical Analysis  

Gold price is 0.03% lower at 1,774, in a muted session after yesterday’s volatile session that made weekly lows before a rebound back to 1,775 mark. The technical outlook is positive for the gold price, and new yearly highs might soon be reached. What can cancel the bullish momentum is if the pice slide below the 50-day moving average. 

On the downside, first support for gold price stands at 1,774 the daily low. A break below might challenge 1,759 the low from yesterday’s trading session. If the sellers continue the pressure, then the next support area stands at 1,747 the low from June 26.

On the flip side, gold will face resistance at 1,771 the daily high. If the gold price breaks above 1,771, then the next resistance would be met at 1,779 the high from July 2. If the price breaks above, then bulls would challenge the 1,800 round figure. 

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Gold Price Daily Chart

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