Good morning, fellas.

The precious metal gold prices closed at $1754.96 after placing a high of $1763.23 and a low of $1742.88.Overall the movement of gold remained bullish throughout the day. GOLD prices rose more than 1% on Monday and hit a multi-week high level of $1763.23, the highest since May 18. After an uptick in the coronavirus cases, the hopes for a quick economic recovery dampened and caused a surge in the yellow metal prices. Investors took refuge in the safe-haven asset as pandemic was again getting out of control.

Some analysts believe that gold has crossed above the level of $1750 and was close to $1765, indicating that the $1800 level was not very far. The reason behind a sudden jump in the prices was the report issued by the World Health Organization, which mentioned that 183,000 COVID-19 cases were reported throughout the world on Sunday. WHO said that the virus was still deadly and has not shown any signs of losing potency. Gold tends to gain at the time of political and economic uncertainty, and after the statement by WHO, gold prices edged multi-weeks high.

The biggest increase in infection cases was reported by North and South America. However, two US Federal Reserve Officials warned that if the pandemic was not brought under control, then the unemployment rate could rise again. Almost 22 out of 50 US states reported a rise in COVID -19 cases after the easing of restrictions over the past 2 months. South Korea and China also reported their struggle to fight the new outbreak. The Australian state of Victoria extended control protocols for another four weeks in order to prevent virus spread. New Zealand also faced an increased number of infected cases.

Central banks have played an important role in preventing the economy from failing in this pandemic by taking aggressive stimulus measures and keeping interest rates lower during the crisis. According to some analysts, the inflation expectations were increasing and pushing real rates lower; this also supported the gold prices on Monday. The Dollar Index fell 0.5% at 97.15 on Monday and made gold cheaper for investors.

Moreover, Goldman Sachs’ changed its prediction for gold and said that the three months forecast was lifted to $1800 from $1600. Goldman Sachs placed its 6-months forecast at $1900 from the previous $1650. It reported that prices had the potential to rise by another 250 dollars or more in the upcoming months. Meanwhile, on the data front, the Existing Home Sales from the United States decreased to 3.91M from the expected 4.15M in May and weighed on the US dollar, which in turn gave strength to gold prices.

Daily Technical Levels
Support Resistance
1754.69 1779.29
1742.22 1791.42
1730.09 18-3.90
Pivot Point: 1766.82

Gold continues to consolidate in a narrow trading range of 1,762 – 1,744 level after violated the triple top pattern around 1,742 level, and bullish trend continuation can lead to gold prices further higher until 1,761 level. XAU/USD is still likely to find support around 38.2% Fibonacci retracement at 1.742 level, and below this, the next support is likely to be found around 1,733.

Good luck!