Gold Price Analysis: XAU/USD pierces $1,765 amid fresh risk-off move
- Gold prices stretch the pullback from $1,755.54.
- Downbeat virus updates from the US, Iran-American tension and unconfirmed blast in Tehran back the recent risk aversion.
- Federal Reserve’s stress test could be cited as a drag on the S&P 500 Futures.
Gold extends the previous day’s recovery moves while taking the bids near $1,765 during the early Friday morning in Asia. The bullion recently benefited from worrisome coronavirus (COVID-19) news concerning the US. Additionally, the Federal Reserve’s action, backed by the 2020 stress test, joined Washington-Tehran tussle to favor the safe-haven.
Fears of 10 times recently pushed the risk-off mood...
The US Centers for Disease Control and Prevention (CDC) Director Robert Redfield was recently quoted by the Washington Post while saying that the actual numbers are 10 times higher than reported. Also fueling the rush to risk safety are the figures from the CDC suggesting a jump in the US cases. As per the latest report, there are 37,667 new cases with 692 deaths in America on June 25.
Other than the virus woes, US Secretary of State Mike Pompeo’s announcement of fresh sanctions on the entities having Iranian connections also weighs on the risk-tone sentiment. Furthermore, the unconfirmed report of a huge blast in Tehran and the trade wars between the US and the rest of the major global economies are some additional factors challenging the market’s optimism.
It’s worth mentioning that the US Federal Reserve struck downbeat comments while conveying the stress test results for 2020. The Fed also capped dividend payment for 34 largest banks and banned them from share repurchase during the third quarter (Q3).
Against this backdrop, the S&P 500 Futures part ways from upbeat Wall Street closing to drop 0.10% to 3,070 as we write.
Considering the off at China and a lack of major data/events on the calendar, the yellow metal traders may keep eyes on the trade/virus updates for fresh impetus. However, the gradual recoveries towards $1,800 are more likely amid broad pessimism.
Technical analysis
While Tuesday’s top surrounding $1,771 and the monthly high of $1,779.41 offer immediate upside barriers, buyers are well inclined towards $1,800 unless breaking the monthly support line, around $1,746 now.