Good morning, fellas.

The precious metal gold prices closed at 1726.58 after placing a high of 1730.22 and a low of 1712.55. Overall the movement of gold remained bullish throughout the day.  GOLD settled a touch lower on Wednesday but remained bullish throughout the day and above $1700 level. The financial markets were trying to figure out the impact of new coronavirus cases and the possibility of the second wave of coronavirus pandemic.

The Federal Reserve’s assurance also supported gold when Chairman Powell stated that it would continuously support the US economy until the effects of COVID-19 faded away. In recent days, the fears of the second wave of coronavirus have been trending after new COVID-19 cases in Beijing hit 106 on Tuesday. China imposed lockdown restrictions once again in the 29 communities of Beijing. Although the number of appearing cases were still small, it was worrying as for almost two months, no single new case was reported from the city.

On the US front, nine states of the US reported either a new single-day high of infected people or set a record for seven-day new coronavirus case averages. Since January, over 2 million cases have been reported in the United States, out of which 115k people died. The Vice President of the US, Mike Pence, said that the fears of coronavirus second wave were exaggerated and supported Donald Trump’s statement that media was trying to scare Americans.

On the other hand, in his second round of testimony to congress, the chairman of Federal Reserve Jerome Powell said on Wednesday that the Federal Reserve would use its tools to the fullest to help households and businesses. He added that full recovery was out of reach until the coronavirus pandemic was over.

Powell stressed that no interest rate hike was going to happen anytime soon, and markets turned their attention towards long-term investing in gold as a result. So, investors took advantage of any rally in the prices. S&P 500 and Dow Jones both edged higher on Wednesday after the hopes of V-shaped recovery of the global economy were dented by the fears of rising cases of coronavirus in nine states of the US.

On the data front, gold also remained supported by the poor than expected Housing Starts in the US, which was reported as 0.97M against the expectations of 1.10M in May. Less than anticipated number weighed on the US dollar and eventually helped gold to gain traction.

Daily Technical Levels

Support Resistance

1723.69 1744.74

1710.42 1752.52

1702.64 1765.79

Pivot point: 1731.47

Gold is also trading with a bullish bias but currently facing resistance at 1,731 level. Below this, selling can be seen until the next support area of 1,722 and 1,717 level. While the closing of candle or violation of 1,731 will extend buying until the next target level of 1,744.

Good luck!