Commodity Market: Gold remains supported above $1,800 as virus spread adds to economic recovery concerns

Gold held firm above the $1,800 mark during Monday’s European trade, as the spread of the novel coronavirus and concerns over its impact over global economic recovery kept the precious metal supported.

“There’s no doubt that we are in the medium-term uptrend for gold. It appears that there’s a segment of the investment community that remains unconvinced about the V shaped recovery, and they’re buying gold,” Michael McCarthy, chief strategist at CMC Markets, said.

New COVID-19 infections kept surging across the United States, with Florida reporting over 10,000 new cases for a fifth consecutive day on Saturday.

Latest data by Johns Hopkins University showed that total confirmed cases of the illness had already surpassed 3.773 million in the United States alone and 14.508 million worldwide. At the same time, global death toll has exceeded 606,000.

As of 9:27 GMT on Monday Spot Gold was inching up 0.09% to trade at $1,811.76 per troy ounce, while moving within a tight daily range of $1,805.88-$1,812.45. The precious metal rose 0.65% last week, while marking its sixth straight weekly advance.

Meanwhile, Gold futures for delivery in August were edging up 0.14% on the day to trade at $1,812.55 per troy ounce, while Silver futures for delivery in September were up 0.40% to trade at $19.843 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.07% on Monday to 95.95, still hovering above one-month lows it registered last week.

Gold traders will continue to pay attention to the European Union Summit, with EU leaders attempting to break an impasse over a proposed EUR 750 billion recovery fund.

“Gold markets are also becoming addicted to large stimulus measures from central banks to provide excess liquidity and which have been driving expectations,” Phillip Futures analysts wrote in an investor note.

Meanwhile, near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of July 20th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on July 28th-29th, or unchanged compared to July 17th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,805.99
R1 – $1,815.98
R2 – $1,821.92
R3 – $1,831.91
R4 – $1,841.91

S1 – $1,800.05
S2 – $1,790.06
S3 – $1,784.12
S4 – $1,778.19

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