Gold sits near multi-year tops, around $1775 level amid softer risk tone
- Gold remains well supported by concerns about rising coronavirus cases globally.
- A turnaround in the risk sentiment further underpinned the safe-haven commodity.
- A modest USD uptick might turn out to be the only factor capping gains for the metal.
Gold traded with a mild positive bias through the early European session and was last seen trading near multi-year tops, just BELOW $1775 level.
Despite the latest optimism over a sharp V-shaped global economic recovery, investors remain concerned about the rising number of coronavirus cases globally. This coupled with a turnaround in the global risk sentiment – as depicted by a sharp fall in the equity market – extended some support to the safe-haven precious metal.
The anti-risk flow was reinforced by an intraday pullback in the US Treasury bond yields, which further benefitted the non-yielding commodity. However, slightly overbought conditions kept a lid on any strong gains amid a modest pickup in the US dollar demand, which tends to undermine demand for the dollar-denominated commodity.
Looking at the technical picture, the metal has already confirmed a near-term bullish breakout from the recent trading range held since mid-April. This, in turn, supports prospects for a further near-term appreciating move. Hence, any corrective slide might still be seen as a buying opportunity amid absent relevant market-moving US economic release.
Technical levels to watch