Gold hits fresh multi-year tops, fast approaching $1800 mark

• Gold built on the previous day’s bullish breakthrough a one-week-old trading range.
• Concerns about rising coronavirus cases continued benefitting the safe-haven metal.
• A subdued USD price action did little to influence the dollar-denominated commodity.

Gold jumped to fresh multi-year tops in the last hour, with bulls now eyeing a move towards the ambitious $1800/ounce target.

Following a brief consolidation through the Asian session on Wednesday, the commodity regained some positive traction and added credence to the overnight breakthrough a one-week-old trading range. Worries about the second wave of coronavirus infections turned out to be one of the key factors that continued benefitting the safe-haven precious metal.

Investors remain concerned that renewed lockdown measures to contain the outbreak would delay the economic recovery and force major central banks to announce additional stimulus measures to support the market. This, in turn, provided an additional boost to the non-yielding yellow metal and remained supportive of the ongoing positive momentum.

Meanwhile, a subdued US dollar price action did little to influence the dollar-denominated commodity’s move to the highest level since October 2012. The USD struggled to gain any meaningful traction and extended its consolidative price action through the early half of Wednesday’s trading action, despite a strong intraday pickup in the US Treasury bond yields.

It will now be interesting to see if bulls are able to maintain their dominant position or opt to take some profits off the table as the focus now shifts to important US macro data. Wednesday’s US economic docket features the release of the ADP report, which will be followed by ISM Manufacturing PMI and minutes of the latest FOMC monetary policy meeting.

Technical levels to watch