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  • Gold fades late-Friday’s recovery moves from $1,774.
  • Risk tone remains positive amid vaccine hopes, mixed clues over Brexit deal.
  • China’s official PMI can offer immediate direction, risk catalysts to remain as the key driver.

Gold prices recede to $1,786, down 0.10% intraday, during the early Asian trading on Monday. In doing so, the yellow metal fades the bounce off the early-July top, marked on Friday. The reason could mainly be traced to the coronavirus (COVID-19) vaccine hopes while mixed clues concerning the Brexit trade deal offer extra direction to the bullion traders.

Bears keep the reins…

Although the global covid numbers are past-60 million and the pandemic is still the biggest threat to the macro economy, the recent developments over the vaccine have been positive to the risk sentiment.

Not only the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) but drug regulators from the US and Europe are also rushing towards approving the top-tier vaccines from Pfizer-BioNtech, Moderna and AstraZeneca. With this, expectations of overcoming the pandemic are on the rise.

 

Additionally, the Brexit deal is getting close to broad agreements, even with differences between the UK and the European Union (EU) over the key issues like fishing, governance and competition rules.

Read: UK’s Raab: Brexit talks in ‘reasonable position’

Amid these plays, Wall Street benchmarks recently surged to record highs while the S&P 500 Futures gains 0.30% intraday by press time.

While the risk catalysts are likely to keep the driver’s seat, China’s November month official activity numbers will also be the key to watch. While the headlines NBS Manufacturing PMI is expected to remain firm, expected 51.5 versus 51.4 prior, the Non-Manufacturing PMI may recede from 56.2 to 52.6 during the stated period. If the key activity data from the world’s second-largest economy remains firm, gold has more room on the downside.

Technical analysis

May high near $1,765 gains gold sellers’ immediate attention unless the quote bounces back beyond a falling trend line from August 12, at $1,825 now.

 

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