• Widespread Dollar weakness helped Gold regain positive traction on Friday.
  • A further decline in US bond yields continued to support this positive development.
  • The bulls appeared to be relatively unaffected by the positive mood in global equity markets.

Gold continued to gain ground during the mid-European session and was last seen trading near the top of its daily trading range, around the 1806-07 region.

The precious metal was the subject of new bids on the last day of the week and has now recouped much of the previous day’s losses. The emergence of significant sales around the US dollar proved to be one of the key factors that benefited the dollar-denominated commodity.

The greenback came under pressure from a strong recovery in the common currency, supported by optimism about an agreement on the proposed €750 billion EU coronavirus recovery fund. This, combined with a further decline in US Treasury bond yields, gave an additional boost to the yellow metal, which is not paying off.

Meanwhile, the positive intra-day momentum seemed to be relatively unaffected by the positive tone surrounding the global stock markets. Despite the continued rise in cases of COVID-19, hopes for a potential vaccine against this highly contagious disease remained supportive of market optimism.

It will now be interesting to see whether the commodity is able to capitalize on intraday gains or whether it is again encountering new supply at higher levels. Therefore, it is prudent to wait for a follow-on buy beyond the $1810 resistance zone before positioning for further gains.

Market participants are now eagerly awaiting the U.S. economic record with the release of housing market data and Michigan’s preliminary consumer sentiment index. This data may influence the Dollar’s price dynamics and create trading opportunities on the last day of the week.

Technical levels to be monitored

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2020-07-17