Gold Clings to Gains Below $1,770 Amid Lighter Risk Tone

Gold Clings to Gains Below $1,770 Amid Lighter Risk Tone

Gold (XAU/USD) traded on a positive note in the early European session and was last spotted trading a few points below the $1,765 resistance.

Gold suffered a slight intraday dip to the $1,753 support level before it attracted some dip-buying which has helped it erase all the previous day’s losses. The yellow metal suffered this drawdown as a result of a strong run-up in the US dollar yesterday.

However, the enduring bearish sentiment in the equity markets lent some support to the commodities safe-haven appeal. The bearish undertone in the market is largely due to worries over a surge in Coronavirus cases globally and weaning prospects for a sharp V-shaped global economic recovery.

The market worries were further stirred by a grim economic report from the International Monetary Fund (IMF) which forecasts a deeper recession in 2020 and expects the global output to contract by 4.9% in 2020.

Meanwhile, the US dollar index added to its overnight gains, which will likely be a major factor capping further gains by the dollar-denominated commodity. Regardless, the prevailing fundamental factors are still in full favor of a $1,800/oz gold price in the near-term.

Market participants will be looking at some major economic data coming from the US later today for clues. The US docket highlights the release of Initial Weekly Jobless Claims, Durable Goods Orders, and the final Q1 GDP.

XAUUSD – Daily Chart

Gold (XAU) Value Forecast — June 25

XAU/USD Major Bias: Bullish

Supply Levels: $1,770, $1,790, and $1,800

Demand Levels: $1,753, $1,745, and $1,735

Gold appears to be going through a corrective phase and further corrections are a strong possibility at this point. However, the overall bias remains bullish. At the moment, we are stuck in a mild consolidation range between $1,770 and 1,760 and the upward scape is the “path of least resistance.”

Meanwhile, the bullish bias might come into contention if gold drops below the $1,735 pivot region.

Note: Learn2.trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results

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