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Adesina Olumide

Gold bulls kept the yellow metal up on Friday as global investors turned their attention to safe-haven assets after a surge in the number of daily COVID-19 cases in the world’s biggest economy.

Gold futures kept it gains at 0.48% to trade $1,812 by 10:54 AM GMT, showing a higher probability of ending the week above critical support levels above $1,800 mark.

It should also be noted that as COVID-19 continues its disrupting global economies lately more than 12.2 million cases and 550,000 deaths have been reported globally as of July 10, according to data obtained from Johns Hopkins University.

The diminishing hope for further stimulus measures from global central banks continues to trigger the yellow metal on the upside.

At present levels, the outlook for gold, after surging past the $1,800 per ounce levels, has added leverage to gold buyers in pulling back some of their long positions and increase their momentum on short term profit taking especially as riskier assets like global stocks continue to accelerate in spite of the daily surge in COVID-19 cases.

For gold, longer-term technical suggest a slowing in the price momentum, with positioning pointing to a market very long on gold and implying a short-term pullback is possible, IG Markets analyst Kyle Rodda said.

After a significant psychological breach, above such critical support level, Gold is not that unlikely to break below the $1780 levels short term, as the greenback keeps decelerating and geopolitical risk strengthens around the world.

However many gold investors would not be astonished to see a sudden and deep sell-off of around 5-10% of its present price level.

A reduction in leveraged tactical longs could drive this. The “I’m long but would like to get longer” mantra has never been echoed so loud in the gold market in the 20 years + I have been active.

For a look at all of today’s economic events, check out our economic calendar.

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