Gold prices have been trading sideways between $1666 and 1765 post hitting 2020’s high of $1788.8 an ounce on 14th April as global equities have shown a decent amount of recovery last month.
Now, countries are gearing up to ease their lockdown restrictions that can create a bit of optimism in the financial markets and may propel gold to resume short-term profit-taking at its first instance. But renewed trade tension between the U.S. and China will lend supports to safe havens including yellow metal. We need to see in which direction gold will be heading first especially when it has two strong opposite factors for the short-term.
States across the U.S. are letting nonessential businesses reopen and are easing stay-at-home orders to restart the economy after the coronavirus forced a near-global halt in economic activity.
U.S. President Donald Trump threatened to consider raising tariffs on China to retaliate for the spread of the coronavirus, renewing fears that trade spat could crimp an economic recovery.
THE latest SPDR Report showed that last week, gold speculators rose bullish bets by 13,158 contracts to a net position of 262,729 contracts, the most in 10-week. While commercial positions dropped by 13,556 contracts to a net position of -293629 contracts in the same week.
For this week, gold prices are likely to remain in $1666-$1725 band initially, break of $1666 will trigger bearish case for $1625 while, above $1725, prices will try to reach $1765 once again.