Gold Remains Strong Despite an Unexpected Surge in Risk AppetiteGold spot price stayed within striking distance of the $1,800 per ounce on Tuesday morning
With global investors and gold traders keeping the precious metal in the bullish territory despite an unexpected surge in risk appetite, shrugging off some of their fears over the Covid-19 pandemic.
Spot gold, which tracks real-time trades in bullion, was slightly down at 0.11% to trade at $1,770 by 03:24 GMT on Tuesday. The bullion indicator had remained above the $1,700 support levels in recent weeks.
Stephen Innes, Chief Global Market Strategist at AxiCorp spoke about the relative bullish sentiments happening in the gold market lately. He said, “A bit of a pause in the gold market overnight as “risk-on” started to resonate once again. But fact Gold prices remain fairly constructive around risk-on is a bullish sign in its own right.
“But we should expect some nervousness over the next few sessions due to potential half year-end re-allocations. And sometimes just like in currency markets, today rebalancing flows around 13:00-15:00 London could be little more than heads you win, tails I lose scenario.
“But with real yields remaining relatively stable overnight, there were few impulses from strategic long-term gold buyers to enter the demand picture. Good sings for gold, however, are that oil prices rose, which should have an inflationary impact of pressuring real yields lower if higher oil prices can be sustained”.
Gold will be facing a key resistance test, breaking above the $1,800 mark, with the relative strength of the U.S dollar rebounding lately.
“Gold is continuing to edge its way towards its next huge test, which will come around $1,800,” said Craig Erlam, markets strategist at New York-based online trading platform OANDA
“A break above here could be huge but, as has been the case for so long with gold, we may just have to be a little patient. The strength of the dollar continues to slow the ascent but it is gradually falling out of favor as economies reopen.”