Renewed Risk Tone in Equity Markets Could Send Gold to New Multi-Year Highs

Market sentiments are starting to swing further into the risk-on territory as the news of a successful vaccine and expectations of additional stimulus for economies across the globe set in.

The European session on Wednesday has shown positive momentum for gold, with the Asian equities market climbing higher after it was announced that Moderna’s Coronavirus vaccine had been ‘green-lighted’ after a successful safety trial.

The upbeat tone from the Asian markets and the growing risk appetite could bolster further gains in gold later in today’s European and American sessions.

However, the question on many investors’ lips is; how long can this renewed sentiment be sustained? Given that Q2 earnings are expected to be poor and Coronavirus cases in the US have now passed 3.5 million, things could turn sour in the equity markets and this could have a rippling effect on gold. Nonetheless, the yellow metal is expected to remain bullish above the $1,790 level.

Gold (XAU) Value Forecast — July 15

XAU/USD Major Bias: Bullish

Supply Levels: $1,815, $1,818, and $1,827

Demand Levels: $1,800, $1,790, and $1,780

Gold performed exactly how we projected. We got a bounce off the ascending trendline and hit an all week high of $1,815 (strong resistance) just a few hours ago. At press time, gold is finding its balance at $1,810 as it attempts to hit a fresh high around $1,818-20.

A dip from this point will likely be supported by the $1,803 level, which could send the price soaring above $1,815 in the near-term.

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