Precious metal prices have been under attack lately as gold bears keeping hampering on amidst rising Covid-19 cases in Western Europe and the United States, bringing the price of gold futures below $1,900/ounce.
For now, the recent price movements in the yellow metal’s market shows the bulls are in a precarious situation in spite of its recent upside. It’s very likely that the selling pressure continue at least in the near term, as U.S dollar bulls seem to be awakened with enough gas to hit near a month high amid pending U.S stimulus packages.
The attack on gold bulls started on Monday when gold prices dropped momentarily to $1,909/ounce, losing about $41 in a single day. Thinking the worse was over became a joke, as shocked bullion traders watched the price of their safe haven assets drop arbitrarily to the $1853/ounce support level before the bulls got some healing and kept gold futures up to trade at $1875/ounce, at the time this report was drafted.
It should also be observed that the last time gold futures prices dropped below $1,900 support level was July ending, hinting gold prices might just have entered a bearish consolidation phase as its been seen oscillating in ranges of $1,850- $1,875/ounce.
Even though the U.S dollar dropped some gains at Friday’s trading session, the bullion assets upward moves have remained limited coupled with low market liquidity presently in play on the bias that the greenback will likely be in demand at least through the end of September.
Present price action, shows the precious metal still struggling and underperforming but if the riskier assets like global equity markets keep up their bearish run relatively, the bears could be kept in check, and gold prices hover above $1,900 price levels.
Having said that, the price correction in the gold market has come quite far now, and It doesn’t look there is enough bearish bias in the tank to test out the key $1,850 levels this week. #USDollarIndex##gold#
Reprinted from Fxempire，the copyright all reserved by the original author.