Gold Bounces Back Above $1,722 On the Heels of a Weak US dollar

Gold (XAU/USD) prices bottomed out at $1,704 in the mid-day session in Europe before bouncing back up above $1,720. This decline was largely fueled by the sideways action of major currency pairs, with low volatility.

The US equities market opened sharply lower, however, it quickly rebounded and erased those losses. This rebound in equities prices caused the US dollar to weaken significantly, given way for a safe-haven boost for gold.

Also, it has recently been reported that the prospect of a second wave in the Coronavirus outbreak is looking more possible as the number of Covid-19 cases in the US and Japan has surged over the weekend. If this leads to the markets getting wind of further lockdown restrictions, optimism over a V-shaped recovery will be ‘thrown out the window’ and this will cause investors to take a flight to safe-haven assets like gold. This could catalyze gold prices to reach the long-awaited $1,800 price mark.

Gold (XAU) Value Forecast — June 15

XAU/USD Major Bias: Bullish

Supply Levels: $1,730, $1,745, and $1,753

Demand Levels: $1,717, $1,710, and $1,705

So far, gold (XAU/USD) has followed our previous projection of a bounce from the baseline of our ascending channel. Gold has recovered strongly above $1,722 and further gains appear to be very likely given US dollar recent weakness. At press time, the yellow metal is trading at $1,727.

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