Gold (XAU/USD) dropped in the early European session on Monday and is currently at a $1,713 price mark. This drop was triggered by last week’s failed attempt to break above the $1,745 resistance which brought about fresh supply for the commodity sending it to multi-day lows.
Gold’s drop appeared to be unaffected by the recent sell-off in the equity markets which doesn’t bode well for its safe-haven status.
Fears over a second wave of the Coronavirus outbreak and the likelihood of the renewal of lockdowns across the globe threaten the prospect of a sharp V-shaped economic recovery. This comes on the heels of the Fed’s dovish outlook for the US economy alongside poor economic data from China which has weighed heavily on investors’ sentiment.
The risk-off bias was bolstered by a fresh leg down in the US Treasury bond yields. The combination of all these components caused bulls to take flight from the yellow metal. Even the beaten-down US dollar price action failed to bolster the dollar-denominated commodity.
Eyes will be watching to see if gold will be able to attract any dip-buying or will continue on a ‘downhill’ journey keeping in mind that there is little market-moving data release for the week.
Gold (XAU) Value Forecast — June 15
XAU/USD Major Bias: Bearish
Supply Levels: $1,722, $1,730, and $1,745
Demand Levels: $1,710, $1,700, and $1,690
Following another strong rejection from the $1,745 key resistance, gold has picked up a mild bearish momentum. Gold is currently at $1,713, just a few points away from $1,710 (the baseline of our ascending channel). We should expect to see a strong rejection from that level which could send gold to higher supply levels ($1,722-30). However, failure to bounce from this line could send the price further below the $1,700 pivot in the near-term which could lead to a retest of our key support at $1,670.
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