- Gold prices drop to the lower end of the $1,990-78 trading range.
- US dollar weakness favors the safe-haven buying amid trade wars, absence of American stimulus.
- Coronavirus (COVID-19) woes add to the bullion’s strength.
- US housing market data, Fedspeak will act as assistants with risk catalysts on the driver’s seat.
Gold prices take rounds to $1,981/82 amid the early Tuesday morning in Asia. In doing so, the yellow metal seesaws around the five-day top, flashed the previous day, while easing with the recently established range between $1,990 and $1,978. While multiple risk catalysts and the greenback’s weakness triggered the precious metal’s rise on Monday, the quote’s latest weakness is more likely a pullback amid a lack of major catalysts.
“No Entry” for bears…
Irrespective of the latest softness in gold prices, the sellers are still barred amid factors challenging the market’s risk-tone sentiment.
Among them, the pandemic takes the front seat as global leaders are jostling to find any cure to the deadly virus. The recent numbers ease from the US, likely due to the fewer testing, but the record death toll in the latest epicenter Victoria joins the fresh rise in cases from France and Germany to keep the fears of the virus on the table.
Secondly, the US-China tussle turns bitter as the Trump administration keeps increasing the hardships of companies from Beijing. Despite the recently stalled trade review meet, American diplomats announced punitive measures for Huawei in the latest attack on the dragon nation.
Moving on, the US Congress fails to match market expectations of another trillion-dollar stimulus amid political differences. The latest raw pushed the Senators to call a month-long off to the House before resuming the work to discuss Post Office issue.
It should be noted that the recently announced US NY Empire State Manufacturing Index offered the fresh blow to the US dollar index (DXY) that gradually drops toward the 26-month bottom marked early in the month.
Amid all these catalysts, Wall Street offered mixed clues whereas S&P 500 Futures stay clueless near 3,380 as we write. Further, the US 10-year Treasury yields dropped 1.8 basis points to 0.69% by the end of Monday’s North American session.
Given the lack of major data/events up for publishing amid the Asian session, gold traders may witness an additional weakness unless any risk-negative headlines cross the wires.
Technical analysis
The bullion’s pullback from 10-day SMA, currently near $1,985, highlights Thursday’s top near $1,965, followed by $1,930, for sellers. However, any more downside past-$1,930 will take rest around $1,900, if not then the latest bottom close to $1,860 will be challenged next. Meanwhile, $2,000 holds the key to the bullion’s further upside beyond $1,985.
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