What’s up, fellas.

The precious metal gold prices closed at $1730.11 after a high of $1743.02 and a low of $1721.56. Overall the movement of gold remained bullish throughout the day. GOLD prices edged higher on Friday on the back of raised fears of the second wave of coronavirus and the idea that Federal Reserve will continue with lower interest rates and loose monetary policy till 2022, which led investors to move towards safe haven assets like the yellow metal.

Last Wednesday, the Federal Reserve said that the rates will remain near zero and that it will do whatever it can for as long as it takes for the economy to recover. The Fed Chair, Jerome Powell, painted a darker picture of the US economy, which also helped gold to gain demand in the market.

Fed policymakers anticipated the US economy to shrink by 6.5% in 2020 and said that the road to economic recovery would be longer than anticipated. Hence, the Fed decided to keep its interest rates near zero till 2022.

Gold gains in the loose monetary policy trend because such policy is considered as inflationary. Gold is used as an inflationary hedge as it is priced in US dollars, and when inflation increases, the value of dollar decreases, and the cost of every ounce of gold in the dollar increases.

Meanwhile, the fears of the second wave of coronavirus increased after the rising numbers of reported cases from many countries after easing of lockdown restrictions. Doctors warned about this scenario before easing lockdown measures, but people and governments ignored it, which led to the second wave of the virus.

With the rising fears of the second wave of coronavirus, the risk of deeper recession increases, which will lead to economic downfall and make recovery even more difficult. The significant uncertainty about how the economy will recover supported prices at the ending day of the week and gold ended with a bullish candle.

On the other hand, at 19:00 GMT, the Prelim UoM Consumer Sentiment for June surged to 78.9 against the expected 75.0 and supported the US dollar. The Prelim UoM Inflation Expectations decreased to 3.0% in June from 3.2% of May. The economic data from the United States came in favor of the US dollar and kept a lid on any further gains in gold prices on Friday.

Daily Technical Levels
Support Resistance
1722.31 1749.46
1711.43 1765.73
1695.16 1776.61
Pivot Point: 1738.58

Gold – XAU/USD – Trade Idea

The precious metal gold is finding support at 1,723 level, which is extended by a series of doji and spinning top patters. Gold is currently holding around 1,726 levels, but the bearish breakout of 1,723 levels can trigger sharp selling. On the lower side, the next support is likely to be found around 1,714 level today. The bullish bias remains strong above 1,723 until 1,736 level, while bearish bias will be stronger below 1,723 until 1,714 level.

Good luck!