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  • Gold remains sluggish around $1,950 after declining from $1,951.86 at the week’s start.
  • Virus woes return to the table but hopes of further stimulus seem battling the safe-haven bulls.
  • US-Iran and Sino-American tussles continue, Brexit headlines offer mixed clues.
  • Fed Chair Powell’s speech will be the key.

Gold prices remain pressured at $1,948.10, down -0.13% intraday, during the pre-Tokyo open Asian trading on Monday. The yellow metal marked gains during the previous two weeks as the US dollar’s downbeat performance favored the bulls cheering risk-off sentiment. Though, buyers seem to await major signals to extend the weekly moves while carrying the recently sluggish intraday moves.

Pessimism continues but with asterisk…

Although coronavirus (COVID-19) risk in Europe is mounting and the trade-political tension between the US and China continues, the risk-aversion wave isn’t taking a turn towards the precious metals off-late. The reason could be traced from the hopes of heavy stimulus from the UK and Japan even as the American policymakers dwindle in announcing the much-awaited stimulus package.

Elsewhere, Tehran and Washington are also probing each other and the US is about to slap over two dozen companies for helping the Arab nation in building arms. Furthermore, China battles the US, India and some other Asian nations like Taiwan, Hong Kong and Thailand silently but the latest comments from President Xi Jinping suggested that the world’s second-largest economy is recovering.

During the last week, hints of prolonged monetary easing from the US Fed, BOJ and BOE seem to have favored the bullion buyers amid the further weakening of the major currencies, especially the US dollar. However, the market’s optimism towards the American leadership hint otherwise.

Against this backdrop, S&P 500 Futures drop 0.34% to 3,305 by the press time. Global equities have been declining for the last two weeks and add a feather into the golden crown.

Moving on, the Asian economic calendar is mostly silent and hence the risk catalysts become the key to watch ahead of Federal Reserve Chairman Jerome Powell’s speech, up at 14:00 GMT. Global traders will seek clues of last week’s optimism to recall the USD bulls, which in turn may weigh on gold prices.

Technical analysis

Repeated bounces off 50-day SMA, currently around $1,940, favor buyers targeting a break of the one-month-old falling trend line near $1,960.