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Gold is on the rise due to weakening USD pressure

Jun 1 2020, 02:03 PM (BDT) | Fortfs.com

At the start of the new week, gold is on the rise of 0.4% amid falling USD pressure and tensions between the US and China.

 

The USD could have been pressured by the protests that broke out in the USA on the weekend. People started protesting in numerous US cities after an African American George Floyd was killed by the police during his arrest. About 5 thousand military personnel were involved to contain and disperse the protesters. Curfews were imposed in 25 major cities.

 

Tough police suppression methods can seriously weaken President Donald Trump's rating, which increases the uncertainty of the US presidential election. The main tool for risk diversification is gold.

 

Investors also continue to monitor the conflict between the US and China. After a speech by Donald Trump on Friday, the parties refrained from making harsh statements about each other. It’s worth noting that Trump announced a complete breakdown of relations and funding with WHO and the launch of the process of canceling the special status and benefits for Hong Kong.

 

Today, the focus of the market will be on PMI data on manufacturing sectors in the US and the EU. Experts predict a gradual recovery after a record fall in April.

 

Regarding the chart, the resistance at the levels of 1725.00 and 1735.00 was broken. The next target for the bulls is the level of 1750.00. The scenario with the growth of quotes today is a priority.

 

Resistance Levels: 1750.00, 1765.00, 1780.00;

 

Support Levels: 1725.00, 1695.00, 1670.00.

 

The main scenario - growth towards 1750.00.

 

An alternative scenario - a decline towards 1725.00.

 

The current outlook background is moderately positive. We would consider longs near the level of 1725.00.

 

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