Gold: Clear Breakout Still Awaited

Spot gold saw swing trading in the last few sessions, amid conflicting news regarding a potential coronavirus vaccine development...

Gold 2

Spot gold saw swing trading in the last few sessions, amid conflicting news regarding a potential coronavirus vaccine development. On Monday, U.S. biotech firm Moderna announced positive results for a coronavirus vaccine trial. However a day later, health-oriented news agency STAT questioned the company's report, pointing out that it did not provide critical data and it would be impossible to draw a conclusion.

The precious metal briefly surpassed its high marked in April, though a follow-through is still yet to be seen. Yesterday, the latest Federal Reserve monetary meeting minutes reiterated the message that the Fed "was committed to using its full range of tools to support the U.S. economy". Meanwhile, Bloomberg data showed that total ETF holdings of gold rose for a 19th straight session on Wednesday, suggesting persistent investors' demand.

From a technical point of view, spot gold remains on the upside as shown on the 1-hour chart. Currently, it is trading within a bullish channel drawn from May 1, while staying above its previous trading range marked in the first half of this month. The level at $1,726 might be considered as the nearest support level, with prices likely to test the 1st and 2nd resistance at $1,765 and $1,776 respectively. Alternatively, a break below may signal a downturn and open a path to $1,711 and $1,691.

Source: TradingView, Gain Capital

More from Gold

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account