Gold Violates Symmetrical Triangle Pattern – Triple Bottom in Play

Despite the fact that the the Group of Seven (G7) meeting did not result in any new surprises, the market trading sentiment managed to extend its positive performance of previous week. It drew some further bids around an all-time high above 4,238.40 on the day. This was witnessed by the positive appearance of Asia-Pacific stocks and upticks in the S&P 500 Futures, which tend to highlight the risk-on mood. However, the upbeat market mood was mainly supported by the optimism concerning the coronavirus (COVID-19) vaccines and US President Joe Biden’s further plans regarding stimulus measures. Meanwhile, the upbeat figures from the US also played a significant role in supporting the market trading mood. The recent Australian approach, which involved signing fresh trade deals with the United Kingdom and firming up ties with Germany and Japan, which included agreements on lower-emission technology usage, had an additional positive impact on the market trading sentiment. In addition to this, the G7 leaders’ agreement to push COVID-19 vaccines and keep relief packages flowing also had a pleasing effect on market optimism. Meanwhile, the receding numbers of coronavirus cases in some major countries also had a positive impact. As a result, the positive movements in the market put a bid under the US stocks, which was seen as one of the key factors that put pressure on the prices of the safe-haven-metal.

On the other hand, the lack of significant data/events, coupled with a cautious mood ahead of this week’s Federal Open Market Committee (FOMC) meeting, is probing the market risk-on mood, which may help limit deeper losses in gold. Due to the pre-FOMC mood and the long weekend in Australia, China, and Hong Kong, the market traders will only focus on the US Federal Reserve’s meeting for further clues on the direction of the central bank’s monetary policy. Meanwhile, the updates over President Joe Biden’s infrastructure spending plan and the COVID-19 situation will continue to play a key role in the direction of bullion.