- Gold bulls take a break as the US dollar seeks to gain ground.
- Fading optimism about the coronavirus vaccine is driving demand for refuge.
- Careful trading to extend before FOMC minutes.
Gold prices (XAU / USD) reverse a drop below the 1750 level, seeking to challenge the new two-day high of 1751.38 reached in early Asia.
The yellow metal strives to regain the bar of 1750, supported by the lukewarm atmosphere of the market. European traders have hit their desks and are reacting to the downturn in US stocks and the mixed action on Asian stocks after optimism about the coronavirus vaccine has waned. According to Reuters, a medical news site reported that the vaccine was insufficient.
Furthermore, weak housing data in the United States, deteriorating morale in Japanese companies, and a collapse in retail sales in Australia have exacerbated fears of an intensification of the global economic contraction and an increase in demand gold refuge.
In addition, the war of words between the United States and China continues to intensify with each passing day and to thwart the commercial relations between the two economies, which ultimately benefits the security gamble.
From a broader perspective, the massive monetary and fiscal stimuli deployed globally to combat the unprecedented viral impact will continue to be the main catalyst for short-term upward price momentum.
While the last testimony of the president of the Federal Reserve (Fed) J. Powell is also positive for the yellow metal. Powell said the Fed is committed to using our full range of tools to support the economy in these tough times.
During the past hour, XAU bulls are struggling with the recovery, as the US dollar also appreciates against its major counterparts in a climate of heightened nervousness before the minutes of the April FOMC meeting. scheduled for Wednesday.
Gold: technical levels to watch
If the rise gains ground, the next resistances are aligned to 1754.39 (November 2012 high) and 1760 (round number). On the downside, immediate support was observed at 1728.67 (May 15 low). A break below which the 1700 brand will be tested.