Gold Remains Bullish in the Wake of Growing Global Crisis

Gold Remains Bullish in the Wake of Growing Global Crisis

Gold (XAU/USD) gained significant bullish strength over the weekend and has peaked at $1,758 in the early European session on Monday on the back of a report by WHO which noted that there has been a record-breaking increase in new Covid-19 cases globally. This prompted investors to seek cover in safe-haven assets like gold.

However, the risk-off sentiment quickly fizzled out following reports of damning global issues. One of the catalysts for the renewed market risk-tone comes from the declining numbers of Coronavirus cases in mainland China and Beijing. Additionally, President Trump’s refusal to place further disciplinary measures on Chinese diplomats involved in the Xinjiang issue has weighed heavily on the yellow metal.

Also, China’s refusal to honor a meeting with US Secretary of State Mike Pompeo over measures taken on China by the US has further deteriorated ties between the two world powers.

Furthermore, attempts by the US to push a ceasefire in Libya and the geopolitical tensions in Asia are some of the factors weighing down on further price gains in gold.

Market participants will be paying keen attention to the virus updates as well as the US-China rift for clues on what the markets will do in the near-term.

XAUUSD – Daily Chart

Gold (XAU) Value Forecast — June 22

XAU/USD Major Bias: Bullish

Supply Levels: $1,753, $1,763, and $1,775

Demand Levels: $1,745, $1,735, and $1,722

Gold has become significantly bullish and will remain so for as long as it stays above the $1,745 mark. However, a decline from its present spot ($1,746) will be considered as a minor pullback and not a reversal. This pullback, if it occurs, will likely be strongly supported by the $1,735 mark. In the meantime, gold looks very likely to take the top of our ascending channel resistance ($1,765) and break above that level in the coming days.

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