Here are the Factors Underpinning a Bullish Bias for Gold

Gold (XAU/USD) remained in a consolidation range in the early European session and was last seen near the $1,765 resistance level.

In a recent editorial by Forbes, contributor Naeem Aslam mapped-out five key factors that are likely to underpin a bullish price action for gold in the coming days.

The key factors include:

A second wave of the novel Coronavirus: Naeem notes that investors are very hesitant towards riskier assets due to the rising Covid-19 cases globally, giving gold a strong safe-haven appeal.

Possible new tariffs on Europe: The Forbes contributor cites that President Trump was weighing new tariffs on $3.1 billion worth of exports from the UK, Spain, Germany, and France. If Trump continues on this path as tensions soar, investors will be forced to seek non-risky assets.

China-US trade war: The trade war between the world powers has taken an even more tense form as the phase-one US-China trade deal has become extremely strained due to the Coronavirus pandemic.

US Unemployment Claims: Naeem notes that the weekly jobless claims data shows just how bad things have gotten in the US labor market. Also, the prospects for a recovery in the near-term seems very unlikely.

Earnings season: Hopes were stoked when some economies began re-opening across the globe. However, that optimism will likely be erased considering the possible second wave will likely trigger unfavorable restrictions on companies’ activities.

Gold (XAU) Value Forecast — June 26

XAU/USD Major Bias: Sideways

Supply Levels: $1,765, $1,780, and $1,800

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

Gold has entered a consolidation range between the $1,765 and $1,758 level. Based on our momentum indicator, this consolidation is acting as a build-up phase for a likely sharp burst to the ambitious $1,800 level. We will see a rally upwards once gold picks up enough buyers at this level.

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