During Thursday's Asian trading hours, the yellow metal prices managed to extend its previous day winning streak. They remained well bid around well above $1,800 level mainly due to the broad-based U.S. dollar weakness, triggered by downbeat U.S. economic data, which eventually lend support to the yellow-metal prices as the weaker USD tend to make cheaper for holders of other currencies to buy the precious metal. In the meantime, the losses in the greenback could also be associated with the prevalent concerns over the U.S. economic recovery amid intensifying coronavirus cases. Across the pond, the downbeat market trading sentiment, driven by the worsening coronavirus (COVID-19) conditions in the U.S. and Europe, also keeps the gold prices bullish. Apart from this, the equity markets' losses were further bolstered after the United States imposed sanctions on the 4-firms from China and Russia, which lends some additional support to the yellow metal prices.
In the meantime, the chatters surrounding America and China's failures to deliver only half of the trade promises in the last 10 months also weighs on the market trading sentiment. On the contrary, the optimism over a possible vaccine and treatment for the highly infectious coronavirus keeps challenging the market risk-off mood, which might cap further gains in the yellow metal prices. The yellow metal prices are currently trading at 1,810.58 and consolidating in the range between 1,806.74 - 1,812.80.
However, the global markets' sentiment failed to extend its previous day's positive performance and remained sour amid Sino-US tensions, downbeat US Jobs data, and growing coronavirus fears. At the data front, the data showed 778,000 jobless claims for the past week, more than the forecast 730,000 claims and the 748,000 claims submitted during the previous week. This data showed that the second wave of coronavirus undermines the labor market recovery, which keeps the market trading sentiment under pressure. In addition to this, the U.S. Personal Income dropped in October while spending ticked higher. The doubts over the U.S. recovery were further bolstered after the minutes from the U.S. Federal Reserve's (Fed) last policy meeting showed that officials remain worried that the economy was on a course for a renewed slowdown. At the same time, Congress keeps trying to approve additional fiscal stimulus amid the rising number of coronavirus cases.
In addition to the U.S., Europe also imposed back to back lockdown, which threatening to undermine Eurozone economic recovery as back to back lockdown restrictions tend to have an instant negative effect on economic activities.
Besides the virus woes, the reason for the bearish trading sentiment could also be associated with the long-lasting US-China tussle, which is continuously picking pace as the U.S. recently imposed sanctions on 4-companies from China and Russia while blaming them for promoting Iran's missile program. In return, the dragon nation instantly warned Biden over his comments on Taiwan, which further fueled the trade/political tension between the world's top two economies. Thereby, all these factors weigh on the market trading sentiment, which could be considered the main factors for the gold on-going bullish moves.
Despite the risk-off-market sentiment, the broad-based U.S. dollar failed to stop its previous day's declining streak and remained bearish on the day as doubts persist over the global economic recovery from COVID-19, witnessed after the American downbeat jobs data. The data showed 778,000 jobless claims for the past week, more than the forecast 730,000 claims, and the 748,000 claims submitted during the previous week. Besides this, the intensifying coronavirus cases in the U.S. also played a significant role in undermining the U.S. dollar. However, the U.S. dollar losses become the key factor that kept the gold prices higher as the price of oil is inversely related to the price of the U.S. dollar. Meantime, the U.S. Dollar Index that tracks the greenback against a bucket of many currencies dropped by 0.09% to 91.918 by 10:05 PM ET (2:05 AM GMT), its lowest level in more than 2-months.
In the absence of the major data/events on the day, the market traders will keep their eyes on the continuous drama surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for a fresh direction.
Daily Support and Resistance
Pivot Point 1813.77
The yellow metal, GOLD, shifted distinctly from the 1,832 mark to 1,790, accommodating beneath an immediate resistance range of 1,832. Closing of candles beneath the 1,832 mark is expected to trigger an additional selling trend unto the next support mark of 1,794. In the 2-hour chart, gold has disrupted the symmetric triangle pattern, prompting an intense bearish move in the market. The RSI and MACD are in support of the selling bias. Let’s consider lingering bearish beneath the 1812.87 mark today, and bullish trade over 1812.87 should be favored. Good luck!