Gold price started the week on negative foot after reports from India that the country’s imports contracted for the fifth straight month in a row, falling by about 30% to USD 2.83 million in April due to the coronavirus lockdowns. India is the largest importer of gold, as the precious metal absorbed in the jewellery industry. India imports about 800-900 tonnes of gold per year. The import of the yellow metal stood at USD 3.97 billion in April 2019. The precious metal imports had been recording negative growth since December last year.
Last week the gold price was under selling pressure as investors sentiment improved amid news for a coronavirus vaccine and the reopening of economies around the globe. Investors ignored the rising tensions between the USA and China and a standoff in Hong Kong, while the dismal economic data from the major economies will continue to weigh on the gold price.
The gold to silver ratio continues the sideway move around the 100-day moving average and close to three-month lows.
Gold price is 0.51% lower at 1,725.62 close to weekly lows. Gold price retreat from nine-year highs as risk-on sentiment returned to markets last week. The technical outlook remains positive for the gold price and only a move below the 1,700 mark can cancel the bullish momentum.
On the downside, first support for gold price stands at 1,723, while more bids might emerge at 1,724 the low from May 19th. In case the selling pressure persists, the next support zone stands at 1,710 the low from May 14.
On the other hand, initial resistance stands at 1,735 the daily top. If the gold price breaks above 1,735 then the next hurdle would be met at 1,748 the high from May 21 trading session. The next supply area will be met at 1,754 the high from May 20.