Home Forex News Gold Under Pressure At Seven-Year High On COVID-19 Recovery

Gold Under Pressure At Seven-Year High On COVID-19 Recovery

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  • Covid-19 Recovery
  • Economic Recession Concerns
  • Weakening Dollar Impact

Gold and Silver prices are under pressure as traders react to swift recovery from the COVID-19. Price appears to have hit a strong resistance level in the Thursday trading session after edging higher early in the week.

Gold under Pressure

A drop in gold and silver prices comes as a surprise given the broad weakness in the U.S dollar. U.S yields remaining under pressure appear to be the latest tailwind taking a toll on the market’s precious metals sentiments. Gold and silver look set to remain under pressure as focus shifts to equities and crude oil, amidst growing hopes of a recovery from the COVID-19 pandemic.

Time                                      : 21/05/2020

Pivot                                     : $1744.28

Technical review                  : Long above 1741.05

Target                                  : $1737.72, $1734.43, $1728.06, $1718.41

Comments                            : Weak Bearish

Last Price                             : $1737

Gold had powered to seven-year highs above the$1750 an ounce level, as investors rushed to safe-haven amidst growing concerns of a global recession triggered by the COVID-19 pandemic. It clocked its highest level since 2012 amidst growing concerns of deteriorating U.S china relations.

Gold Outlook

Amidst the recent pullback, gold prices remain bullish, given the uncertainty around economic recovery and geopolitical tensions. Fear of inflation also looks set to be a key driver of gold prices on pullbacks from current highs.

For gold prices to edge higher from current levels, inflation levels need to tick higher according to gold bull Peter Schiff. So far, the COVID-19 pandemic has only provided deflation. The Federal Reserve pumping trillions of dollars into the economy have only gone to strengthen the dollar conversely, limiting the gold upside movement.

In the yellow metal, bulls believe that the deflationary spiral that has stagnated gold upside action is slowly coming to a halt. Likewise, the precious metal looks set to edge higher as a safe haven on the growing risk of economic recession. Weakness in the U.S Dollar is another development likely to offer support to gold prices going forward.

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