Gold Clear Breakout Still Awaited

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By :  ,  Financial Analyst

Gold: Clear Breakout Still Awaited

Spot gold saw swing trading in the last few sessions, amid conflicting news regarding a potential coronavirus vaccine development. On Monday, U.S. biotech firm Moderna announced positive results for a coronavirus vaccine trial. However a day later, health-oriented news agency STAT questioned the company's report, pointing out that it did not provide critical data and it would be impossible to draw a conclusion.

The precious metal briefly surpassed its high marked in April, though a follow-through is still yet to be seen. Yesterday, the latest Federal Reserve monetary meeting minutes reiterated the message that the Fed "was committed to using its full range of tools to support the U.S. economy". Meanwhile, Bloomberg data showed that total ETF holdings of gold rose for a 19th straight session on Wednesday, suggesting persistent investors' demand.

From a technical point of view, spot gold remains on the upside as shown on the 1-hour chart. Currently, it is trading within a bullish channel drawn from May 1, while staying above its previous trading range marked in the first half of this month. The level at $1,726 might be considered as the nearest support level, with prices likely to test the 1st and 2nd resistance at $1,765 and $1,776 respectively. Alternatively, a break below may signal a downturn and open a path to $1,711 and $1,691.

Source: TradingView, Gain Capital

Related tags: Gold Commodities Fed

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