[ad_1]
- Gold prices trim Tuesday’s losses and rebound at $ 1,963.36.
- Risk reset joins technical pause to keep buyers hopeful.
- The struggle between the US and China, the ambiguity over the US aid package call into question the rebound of the US dollar driven by the ISM manufacturing PMI.
- Big Pacific companies are slated for data / events in Asia, nothing new for risk.
Gold prices maintain the recovery movements of the last hour of Tuesday as bids rise near $ 1,971 amid the opening of operations prior to Tokyo on Wednesday. In doing so, the yellow metal prints a four-day winning streak and remains free of the 21-day Simple Moving Average (SMA) after a two-week gap the day before. Although the recovery in risk and the persistent weakness of the US dollar helped the bullion in recent days, the latest change in market sentiment appears to challenge buyers.
Bulls reinforcing the grip …
Even if the US dollar manages to bounce off the 28-month low, mainly due to the strong ISM manufacturing PMI, dollar bulls are unconvinced amid looming uncertainty about the US aid package to fight the coronavirus (COVID -19). Also negatively affecting the US currency is the tension between China and the United States, recently cited by US Secretary of State Mike Pompeo. Additionally, weak US Treasury yields, which were down two basis points (bp) the day before, are also weighing on the dollar and in turn helping gold.
However, the rally in stocks is something that challenges the bulls by offering another great investment avenue with the recent record high in the S&P 500. Also on the same side are hopes for the vaccine. Global pharmaceutical companies are leaping into final testing with one of the top candidates developed by AstraZeneca beginning their testing starting today.
Against this backdrop, buyers can applaud the recent breakout of the 21-day SMA, the first in two weeks, as they focus on the main negatives of risk, including COVID-19 pessimism and the US-China troubles. . However, any extension of the recovery of the US dollar could negatively affect the yellow metal.
While looking for the same, Williams’ comments from the Fed and the US ADP Job Shift, 950k expected versus 167k previously, will be the key to keep in mind.
Technical analysis
Unless the $ 1,967 level that comprises the 21-day SMA is broken, the bulls may target the August 18 high near $ 2,015.
