Gold (XAU/USD) has stabilized around the $1,757 level (for the time being) in the early European session on Tuesday. The yellow metal appears to have slowed down after it failed to break above the $1,765 resistance yesterday.
White House Adviser Peter Navarro’s dovish statements on the Sino-American trade deal yesterday, set the market into a risk-off mood. This sentiment was further boosted by the latest Covid-19 numbers from China as well as troubling news concerning the dragon nation.
The US policymakers placed Chinese media on the list that mandates the outlets to follow guidelines like foreign embassies. This action has further escalated the US-China tensions at a period when the Trump administration has been quiet on the trade deal. The reason might be as a result of China’s ban on meat from America’s Tyson.
The increasing number of Covid-19 cases in China coupled with a grim outlook from the World Bank President David R. Malpass has added a burden on the market’s risk sentiment.
On a brighter note, news suggesting that an increased supply of a possible cure to the virus by the end of the year and the US Democrats $1.5 trillion infrastructure plan may well restrict a full-blown risk aversion wave in the market.
Gold (XAU) Value Forecast — June 23
XAU/USD Major Bias: Bullish
Supply Levels: $1,765, $1,770, and $1,775
Demand Levels: $1,750, $1,745, and $1,735
Unless we see a—not so likely—fall below the $1,722 mark, gold will remain strongly bullish for the time being. A sustained break above the $1,765 is the much-awaited catalyst for a drastic increase in price. The $1,800 round figure continues to look more and achievable by the day.
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