Gold Prices (XAU/USD) has continued to soar high and for four consecutive sessions, the yellow metal has opened above its 7-seven-year high. Gold experienced a retracement from $1,726 on Wednesday during the Asian trading session.
Spot gold surged to highs of $1,747.72 per ounce almost nearing its subsequent resistance of $1,750/oz. The yellow metal received support from concerns about a downturn in the global economy due to coronavirus pandemic.
Weakening US dollar offers support to gold
Although stock markets witnessed some gains on the Tuesday session, the disappointing corporate quarterly results are likely to offer support for a gold rush. Various companies are expected to release Q1 results beginning this week and there are low expectations because of the impact of COVID-19 and this is likely to add to the allure for bullion. However, if the corporate results record any beat in estimates that might stall the progress of gold.
Similarly, the US dollar has been weakening which has offered a lift to gold. The DX has lost ground dropping below 99 points. This, therefore, is likely to a high volume level at around 50% mean return to the rally experienced in March.
The recent pullback in bullion can be attributed to President Trump’s optimistic sentiments about the reopening of the economy. Trump said in the COVID-19 Task Force Briefing that the US expects early reopening in some states.
Gold technical analysis
June gold on COMEX added 0.4% or $7.50 to $1,768.90 per ounce after having made an intraday high of $1,788.80. This was new levels since October 2021 and it is expected that gold will even soar higher reflecting positive market sentiment.
Currently gold is gearing for more gains to resistance levels of $1,742.95 having established support levels at $1,708.87. Unless bullion drops below the $1,700 levels it is likely to consolidate above the current highs which further asserts its upside potential. A surge to a monthly target just below the $1,800 per ounce level will be something bulls will be looking to.