Commodity Market: Gold eyes September 2011 all-time high amid accelerating pandemic, escalating US-China tensions

Gold continued its advance for a sixth straight trading day on Friday, while remaining in proximity to highs last seen in September 2011 amid economic uncertainty stemming from accelerating COVID-19 pandemic and escalating tensions between China and the United States.

The latest data by the Center for Systems Science and Engineering at Johns Hopkins University showed total confirmed COVID-19 cases had already surpassed 15.513 million worldwide, with US cases now exceeding 4.038 million. Global death toll has surpassed 633,000.

Meanwhile, earlier on Friday China ordered the United States to close its consulate in the city of Chengdu in the Sichuan province, in response to US demand earlier this week that Chinese consulate in Houston be closed.

Relations between Beijing and Washington have been severed over a range of matters from the coronavirus pandemic to China’s trade and business practices, territorial claims in the South China Sea and the national security legislation on Hong Kong. There has been a bit of relief, on the other hand, that so far the trade deal between the two economic superpowers has remained intact.

A global environment marked by economic and political uncertainty tends to benefit Gold as a store of value.

As of 9:16 GMT on Friday Spot Gold was edging up 0.39% to trade at $1,894.89 per troy ounce, after earlier touching an intraday high of $1,898.12, or a price level not seen since September 6th 2011 ($1,921.07), an all-time high. The precious metal has risen 4.65% so far this week, while being set to register its best performance since the week ended on March 27th.

Meanwhile, Gold futures for delivery in August were edging up 0.17% on the day to trade at $1,893.15 per troy ounce, while Silver futures for delivery in September were down 0.62% to trade at $22.845 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was edging down 0.13% on Friday to 94.65, after sliding as low as 94.57, or a level not seen since September 27th 2018 (94.21).

Today Gold traders will be paying attention to the monthly data on US new homes sales due out at 14:00 GMT as well as to the preliminary data by Markit on business conditions in US manufacturing and services sectors due out at 13:45 GMT.

Meanwhile, near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of July 24th, 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 23rd.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,883.25
R1 – $1,902.66
R2 – $1,917.78
R3 – $1,937.18
R4 – $1,956.58

S1 – $1,868.13
S2 – $1,848.73
S3 – $1,833.61
S4 – $1,818.48

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