- Gold bulls extend control above 1730 levels.
- Flight to safety amid escalation in US-China tensions boosts gold.
- Gold on track for a weekly decline, despite hitting 7-year tops.
The recovery in Gold prices (XAU/USD) from Thursday’s troughs of 1717.34 regained traction above the 1730 mark in European trading, following a brief consolidative stint in Asia.
The fresh leg higher in the yellow metal is mainly driven by the European traders’ reaction to the escalation in the US-China tensions, in the face of Beijing taking ‘forceful measures’ on Hong Kong under the National Security bill.
The deepening concerns prompted a fresh flight to safety wave and lifted the ultimate safe-haven back on the 1730 barrier. The spot now trades with 0.44% gains at 1735.56, although remains on track to book a weekly loss.
The weekly decline could be likely associated with the increased expectations of a global economic upturn, as some countries relaxed lockdown restrictions. Meanwhile, the US dollar continued to draw the haven demand on the back of the US-China row and fading optimism over the anti-coronavirus vaccine that weighed heavily on the global stocks.
Looking ahead, the US dollar price action and risk trends will continue to influence the gold trades while the near-term sentiment around the metal will likely remain underpinned by the massive stimulus announced globally to combat the virus impact.
Gold: Technical levels to watch
With the renewed uptick, the next resistances are aligned at 1740 (round number), 1749.14 (May 21 high) and 1765.38 (7-year high). To the downside, immediate support is seen at 1716.31 (21-DMA). A break below which the 1700 mark will be tested.
Gold: Additional levels
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