Gold Resurfaces Above $1,700, Aims for Higher Resistance Levels

Gold Resurfaces Above $1,700, Aims for Higher Resistance Levels

Gold (XAU/USD) climbed back above the $1,700 psychological line in the early hours of Thursday after suffering a sharp decline to four-week lows. The recovery comes on the heels of the worsening US-China ties.

As a retaliation to the suspension of American carriers from re-entering China, the US government has placed a ban on Chinese airline passenger flights from entering or leaving the country. This travel ban will take effect from the 16th of this month.

The recent development has thrown a heavy blanket on the hopes for a sharp V-shaped recovery for the global economy. This has consequently provided strong support for the yellow metal and boosted its safe-haven appeal.

The USD index was in strong demand yesterday allowing it to stage a strong recovery from its lowest point since March. A strong USD is one of the major factors keeping investors from becoming aggressively bullish with gold.

Traders are now looking forward to the Weekly Jobless Claims data from the US believed to have a strong short-term influence on price dynamics of the XAU/USD. However, the major focus for the week is the monthly jobs/unemployment report, popularly known as the NFP which will be released tomorrow.

XAUUSD – Daily Chart

Gold (XAU) Value Forecast — June 4

XAU/USD Major Bias: Bullish

Supply Levels: $1,722, $1,730, and $1,745

Demand Levels: $1,706, $1,700, and $1,690

Gold remains bullish despite yesterday’s plunge below the $1,700 pivot. Losses were swiftly capped by the $1,690 support level. The price appears to have stabilized above the pivot and will be attempting to get back to its previous highs at the top of the channel. Another decline from this level is not out of the picture, however, it will likely be strongly supported by the $1,690 price mark.

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