Daily Brief Aug 08 – Everything You Need to Know About Gold Today! 

Posted Monday, August 3, 2020 by
Arslan Butt • 2 min read

Good morning, traders, 

The GOLD prices closed at 1,974.36, after placing a high of 1,983.02 and a low of 1,954.38. Overall, the movement of gold remained bullish throughout the day. On Friday, Gold prices edged higher, as the worsening COVID-19 pandemic continued to suppress the global economy. In July, gold prices posted the best monthly gain since February 2016, amid the sliding US dollar and terrible economic numbers.

Gold prices hit a record high of 1,980 on Tuesday, moving up by over 10% in the month of July. The extreme weakness of the dollar helped gold to move even higher, whereas the US dollar was on track for the most significant monthly drop in almost a decade.

According to data, the US economy suffered its hardest blow since the Great Depression in the second quarter of 2020, due to the coronavirus pandemic, while investors also geared up for an uncertain political situation in the country.

 GOLD prices have gained nearly 30% so far this year, boosted by low-interest rates globally, and widespread stimulus from central banks worldwide, all of which added support to the yellow metal, which was considered a refuge from inflation and debasement of the currency.

The current situation has persisted for quite a long time, and with the policy rates already close to or below zero, the higher inflation rate will continue to support gold, pushing it up to $ 3,000 per ounce in the coming 18 months. On the data front, the Core PCE Price Index was in line with the expectations of 0.2% in June. Personal Spending in June exceeded the expectations of 5.3%, coming in at 5.6%. The Employment Cost Index for the second quarter came in at 0.5%, against the expected 0.6%, weighing on the US dollar. The Personal Income for June dropped by -1.1%, from the projected -0.8%. At 18:45 GMT, the Chicago PMI rose to 51.9, from the anticipated 44.0 in July. At 19:00 GMT, the Revised UoM Consumer Sentiment was expected at 72.5, and the Revised UoM Inflation Expectations also came in as expected at 3.0%.

The mixed macroeconomic data from the US had virtually no effect on gold prices on Friday, as investors ignored the data. On the US-China front, the United States intensified its economic pressure on China’s Xinjiang province on Friday, imposing sanctions on a powerful Chinese company, and on two officials for human rights abuses against Uighurs and other ethnic minorities.

US Secretary of State Mike Pompeo said that human rights abuses by the Chinese Communist Party in Xinjiang, China, against Uyghurs and other Muslim minorities, counted as the “stain of the century”.

This move came in one week after US President Donald Trump closed the Chinese consulate in Houston, amid allegations that it was a spy hub. The US diplomatic mission in the south-western city of Chengdu was closed in retaliation, on similar grounds.

The FBI started arresting Chinese researchers at US universities amid suspicions of links to the People’s Liberation Army (PLA) – the researchers temporarily took refuge in the consulate in San Francisco before surrendering. The escalating tensions between the world’s two biggest economies kept the safe-haven demand intact, hence the gains in gold this month.

Daily Technical Levels

Support Resistance

1978.36 1994.11

1970.53 2002.03

1962.61 2009.86

Pivot point: 1986.28


 GOLD soared sharply, to place a new high at around the 1,990 level, before dropping suddenly immediately thereafter, and now it is trading at the 1,974 level. Gold could find immediate support at the 1,970 level now, and a bearish crossover below this level could lead its prices towards the 1,963 mark. While an immediate resistance remains at 1,981 and above, 1,989 will extend major resistance. At over 1,963, the bullish bias seems dominant. Good luck! 


Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments