Gold Price Stops For Breath Ahead of Yearly Highs

Gold price trades lower today amid optimism for a fast recovery after better than expected economic data. In the USA the Case-Shiller Home Price Index rises 4% in April above the expectations of 3.8%. The Redbook Index came in at -0.7% for June 26; the previous reading was at -1.4%. From China, the manufacturing purchasing managers’ index (PMI) rose to 50.9, up from 50.6 in May, and beat the economist’s expectations of 50.4. The non-manufacturing PMI rose to 54.4, also better than expectations of 53.6.

The improvement in some economic indicators from China, Europe and the USA might put pressure on the gold price.

On the other hand, supportive for gold price is the rising number of new coronavirus infections that might halt the reopening procedure in some states. The uncertainty due to the coronavirus spread also supports gold price as investors continue to seek safe-haven assets.

The Fed Chair Jerome Powell said the outlook for the U.S. economy is extraordinarily uncertain and will depend both on containing the COVID-19 and on the government’s efforts to support the recovery.

Download our Q2 Market Global Market Outlook

Gold Price Support And Resistance

Gold price is 0.11% lower at 1,769, as the precious metal hesitates ahead of the yearly highs. Bulls are in control of the situation here, and the pullbacks should be considered as a buying opportunity. Only a close below the 50-day moving average might cancel the bullish momentum. 

On the downside, initial support for gold stands at 1,764 the daily low, while more buying interest might emerge at 1,747 the low from June 26. If the sellers continue the selling pressure, then the next support area stands at 1,724 the 50-day moving average. 

On the other side, the gold price will face resistance at 1,773 the daily high. If the gold price breaks above 1,773, then the next resistance would be met at 1,777 the yearly high. If gold price breaks above, then bulls would challenge the 1,800 round figure. 

Don’t miss a beat! Follow us on Telegram and Twitter.

More content