- XAU bulls and bears struggle to gain control amid tepid risk tone.
- USD keeps reign amid coronavirus second-wave fears.
- All eyes on global market sentiment and Powell’s speech.
Fears over the coronavirus resurgence continue to persist in Asia, with an uptick in Beijing’s new infections raising doubts over the ‘under control’ situation, as touted by the Chinese official on Thursday. Therefore, the downside in the yellow metal remains limited near 1720 levels.
Meanwhile, the positive tone seen in the Asian equities and S&P 500 futures challenges the bulls’ commitment on its way north, which keeps further upside elusive.
Gold prices lack a clear directional bias as markets remain divided between the fears over the second wave of the virus and optimism over the global economic recovery, as reflected by the recent rally in stocks.
However, from a broader perspective, the bullish bias remains for the metal as long as it holds above the 1700 mark. The precious metal fell sharply on Thursday after reaching as high as 1737 following a drop in the US jobless claims and reports from Beijing that they have brought the outbreak under control.
Markets now look forward to the US Federal Reserve (Fed) Chair Jerome Powell’s speech amid the lack of significant US economic news. The virus stats from the US will continue to have a major bearing on the global markets, eventually impacting the safe-haven, gold.
Gold: Technical levels to consider
Bulls extend their struggle to takeout the 1730 barrier. A sustained breakthrough above the latter could open the doors for the horizontal resistance near 1735. To the downside, the next support is seen at 1720, below which Wednesday’s low of 1712.76 could be tested.