Gold Up As The U.S. Dollar Eased Back A Bit From Its Earlier Highs

  • Commodities Analysis

Gold yesterday settled up by 0.56% at 51353 as the U.S. dollar eased back a bit from its earlier highs. Continued U.S.-China tension, the upcoming U.S. presidential elections, the pandemic, and currency dislocation are adding to reasons for gold buyers to add on bigger dips in prices. President Donald Trump on Monday said he intends to “end reliance on China once and for all, whether it’s decoupling or putting in massive tariffs like I’ve been doing already.”
 
Rising tensions between the U.S. and China, and reports showing a jump in coronavirus cases in several parts across Europe and in India have raised concerns about economic growth. Market players also awaited the policy meeting of the Bank of Canada on Wednesday, while the U.S. Fed's next meeting is scheduled for next week. Global central banks have saturated markets with extraordinary liquidity steps to offset the economic damage inflicted by the coronavirus.
 
Retail demand for physical gold picked up slightly in India on a dip in domestic prices and a festival, but top bullion hubs across Asia saw muted activity. Dealers offered discounts of up to $40 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, easing from last week's $43, a five-month peak.
 
Technically market is under short covering as market has witnessed a drop in open interest by -4.28% to settled at 12763 while prices up 288 rupees, now Gold is getting support at 50852 and below the same could see a test of 50352 levels, and resistance is now likely to be seen at 51629, a move above could see prices testing 51906.
 
Trading Ideas:
# Gold trading range for the day is 50352-51906.
# Gold prices moved higher as the U.S. dollar eased back a bit from its earlier highs.
# Continued U.S.-China tension, the upcoming U.S. presidential elections, the pandemic, and currency dislocation are adding to reasons for gold buyers to add on dips
# Market players also awaited the policy meeting of the Bank of Canada on Wednesday, while the U.S. Fed's next meeting is scheduled for next week.

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