Gold Retests Upward Channel
Gold prices were closed at $1812.15 after placing a high of $1819.80 and a low of $1795.05. Gold fell to its lowest level in one week as investors preferred the U.S. dollar over precious metal amid concerns the spread of the Delta coronavirus variant could slow down the global economic recovery.
The U.S. Dollar Index that measures the greenback value against the basket of six major currencies rose to its highest since the first week of April at 93.05. The strength in the U.S. dollar was limiting the upside in gold prices as the emerging concerns about the delta variant of coronavirus and its impact on global economic growth were giving safe-haven flows to the dollar and bonds.
These inflows added strength to the U.S. dollar and pushed its value 0.2% high to a more than 3-month high against its rival currencies and made gold more expensive for holders of other currencies. The sentiment in the wider financial markets remained weak because of the increased risk appetite by growing inflationary pressures and persistent surge in COVID-19 cases.
The rising coronavirus cases have forced many countries, particularly in Asia that were struggling to reduce the spread of highly contagious variants of the coronavirus, to re-impose lockdown measures that added in the safe-haven appeal in the market and pushed the U.S. dollar further higher against the yellow metal. Meanwhile, on Monday the U.S. President Joe Biden took a softer tone when talking about Facebook Inc. after saying last week that the social media company was killing people by spreading misinformation about the coronavirus vaccines.
On Monday, Biden said that he meant in the previous statement that dozens of users were spreading the most amount of misinformation on the social media platform, but not the company itself. He said that Facebook was not killing people, but 12 people were out there giving misinformation. Anyone listening to the misinformation was getting hurt by it. It was killing people, and it was bad information. He urged Facebook to do more to stop the spread of misinformation.
In its defense, Facebook sharply responded that 85% of its users were vaccinated or wanted to be vaccinated. The goal set by the President for 70% of Americans to be vaccinated by July 4, and the reason that the goal was missed was not Facebook. On the data front, at 19:00 GMT, the NAHB Housing Market Index for July dropped to 80 against the projected 82 and weighed on the U.S. dollar that kept the loss in gold prices limited on Monday.
Gold Intraday Technical Level
Pivot Point: 1808.40
Gold - XAU/USD - Technical Outlook
On Tuesday, the precious metal gold is trading with a bullish bias at 1,817 levels. Yesterday, gold violated the upward channel at the 1,810 level to retest the double bottom support level of 1,799. However, it soon bounced off to retest the resistance level of 1,819 level. This particular level is extended by a previously violated upward channel. The 50 EMA crossover is also supporting a bullish trend in gold. At the same time, the MACD is holding at +0.357 level, demonstrating a bullish bias. Gold’s resistance stays at 1,819 level on the upper side, and a bullish breakout of this level exposes gold price towards 1,832 level. All the best!
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.