The second wave of coronavirus in the US is rising apprehensions among investors. NFP report can either serene or jolt the markets.
There are chances of gains for the gold in the third straight week.
Gold has stirred its top position by 1.3% in the week.
Impact of Coronavirus on Precious Metals:
The global demand for precious metals has been increased after the outbreak of COVID-19 pandemic and gold prices have lifted powerfully at $1747 lows, to recover and return to $1,765 level, a few pips below multi-year highs at $1,779.
Gold Hit All-Time Highs:
This week’s uncertain condition of equities markets is unjustifiable. On some points, there has been a weakness in the stocks in addition to the US Dollar weakness, just like we saw on Friday.Gold hit its all-time high and rallied 1.3% in the week after breaking out seven-year highs early in the week and the next resistance zone isUSD1800 per troy ounce level in June and then August 2012 highs at USD 1791. Before the succeeding sell-off, there were three strong rejections and it was prior amalgamation top.
The Relative Strength Index is indicating a deviation but if red trend line breaks then the market can test all-time highs. There is a problem that when stocks sell-off the Dollar meets its high gains in the precious metal. There are chances, where Gold can hit the top if USD and stocks fall at the same time.
There is a huge convergence level at USD 1800 per troy ounce psychological resistance zone which can be seen by Fibonacci extensions. The price has been moved higher by breaking the trend line but The Relative Strength Index was indicatingthe same deviation.
For the significant retracement, USD 1675.40 would be the decent zone on which a buyer would agree to trade. This method has been used many times before. If the buyer comes into play then maybe market touch the USD 1800 level or even higher. If it breaks USD 1800 level then it is likely that the market would reach the USD 2000 level.
Central banks around the world will likely flood the markets with the currency and it drives up the value of commodities like gold.Moreover gold will go much further because, in the longer run, there will be abundant buyers who continue to push the gold high.
At the weekend, the market is going to incorporate some more news about the COVID-19 pandemic from the Southern States of United States of America because George Floyd’s death protest has startedthe second wave of coronavirus and which will tremble the U.S. economy.If there is a weekend or Monday effect then this could be upside down, depending upon the intensity of bad news.
NFP and Chinese Manufacturing PMI:
Latest NFP and Chinese Manufacturing PMI data will be incorporated into the market in the following week. Unemployment claims are still developing and it has a great impact on the Dollar. Both NFP and Chinese Manufacturing PMIcan move the market in any direction and cause instability.