Daily Brief, Jun 10: Everything You Need to Know About Gold Today

Posted Wednesday, June 10, 2020 by
Arslan Butt • 2 min read

Today in the Asian trading session, the safe haven metal prices were flashing green and rose to $1,716 level while representing 0.12% gains on the day mainly due to the broad-based US dollar selling bias ahead of the Federal Reserve policy meeting scheduled for later in the day. The risk-off market sentiment was triggered by the intensifying geopolitical tensions which eventually provided some support to the safe haven assets, including the yellow metal. At press time, GOLD prices are currently trading at 1,715.66 and consolidating in the range between 1,712.39 and 1,718.65. However, the traders are cautious about placing any strong position ahead of the Fed policy meeting.

The reason for the risk-off market sentiment could be attributed to the intensified political tensions of the United States and the United Kingdom with China. The dragon nation recently warned to impose penalties on the UK bank HSBC as well as threatened to break promises to build nuclear power plants in the UK unless China’s Huawei gets permission to build its 5G network. As a result, the US Secretary of State Mike Pompeo recently criticized China’s Communist Party for dominating the UK.

On the other hand, traders failed to cheer the downbeat figures of China’s May inflation data. Moreover, the risk-off market sentiment was further bolstered by Japan’s statement about not opening borders with China for now.

At the USD front, the broad-based US dollar remains pressured near the lowest since early-March as traders are awaiting details from the Federal Reserve policy meeting scheduled to happen later in the day. It should be noted that the Fed might announce measures to control the recent increase in bond yields, which will likely push the dollar down further. Whereas, the US Dollar Index that tracks the greenback against a basket of other currencies moved slightly by 0.01% to 96.332 by 11:36 PM ET (4:36 AM GMT). As a result, the 10-year US Treasury yields remain mostly unchanged around 0.83% while stocks in Asia flash mixed clues.

Looking forward, the US Consumer Price Index (CPI) data for May will be key to watch and might offer important moves for the yellow metal ahead of the Fed monetary policy decision. The US CPI is expected to decline from 0.3% to 0.2% in May, while the Fed’s hints about future interest rates and economic projections will be key to watch during the late-US session. On the other hand, geopolitical tensions in Libya, Korea, and concerning China will not lose importance.

Daily Support and Resistance
S1 1666.1
S2 1680.62
S3 1689.47
Pivot Point 1695.14
R1 1703.99
R2 1709.66
R3 1724.18

Gold is heading north, and it may target the next resistance level of 1,720 level. Bullish trend continuation and breakout of 1,720 levels can lead to higher gold prices until the next target level of 1,732. Let’s consider taking buying trades over 1,710 to target 1,722. Closing of candles and sign of bearish reversal below 1,722 will help us capture a quick sell trade in gold today.

Good luck!

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