Daily Brief, Apr 7: Everything You Need to Know About Gold Today - Forex News by FX Leaders

Daily Brief, Apr 7: Everything You Need to Know About Gold Today

Posted Tuesday, April 7, 2020 by
Arslan Butt • 2 min read

Today in the early Asian session, the safe haven metal prices continued to rise and crossed the 1,700 marks and are still struggling to reach toward the mid-above 1,700 level despite the risk-on sentiment in the market. However, gold prices are getting support from the fresh statement that show US President Donald Trump’s willingness to announce another aid package to combat the virus. As of writing, GOLD is currently trading at 1,715.30 and consolidating in the range between 1,704.30 and 1,742.20.

Gold futures were up by 1.43% at $1,717.9 by 9:24 PM ET (2:24 AM GMT) as investors expect further global measures to control the economic damage caused by the COVID-19 pandemic. We can say that gold’s physical demand continues to manage and support prices. In contrast, huge amounts of stimulus are effectively weakening currencies, so gold is getting support from all directions for its demand.

As we already mentioned, the United States President Donald Trump is showing a willingness to declare another relief package after the House Speaker Nancy Pelosi gave hints for the same. As a result, the risk sentiment got a boost. The reason behind the risk-on market sentiment could also be hints of further stimulus from Japan and New Zealand.

At the coronavirus front, the decreasing fear of the spreading pandemic is also the reason behind the risk-on market sentiment. While the receding figures from Spain, Italy, and the UK, the recent decline in the British death losses from the high of April 4 figures of 708 to 439 is also providing support to the risk sentiment in the market.

The prices for the yellow metal normally move in the opposite direction to the equity markets, and Asian stocks are also flashing green on the same day. As a result, 10-year US treasury yields remain positive around 0.68%, whereas stocks in China and Japan also marked gains by press time.

It is also worth mentioning that the US President indicated China’s purchase worth $40-50 billion of US agricultural products, even as he asked for help from China in order to control the deadly virus. The recent data from China’s Hubei suggests a showed no new cases of the disease on April 6. This also boosted the risk sentiment.

Looking forward, investors will keep their eyes on the coronavirus updates. The government/central bank struggles to control the economic impact of the deadly disease will also be key to watch for near-term direction.

Daily Support and Resistance
S1 1576.16
S2 1596.66
S3 1607.74
Pivot Point 1617.15
R1 1628.24
R2 1637.65
R3 1658.14

Gold has violated the sideways trading range of 1,620 – 1,608 in the wake of increased safe haven appeal, weaker NFP, and an increased number of COVID-19 cases around the globe. Gold is now likely to find next resistance around 1,671, and violation of this level may head towards the next resistance level of 1,689. Conversely, the support stays around 1,650. The bullish bias remains strong as gold has closed a bullish engulfing candle on the daily chart, which may keep bulls motivated to remain in the market. Good luck!

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