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Gold is trading below $ 1,700

Jun 8 2020, 01:37 PM (BDT) |

On Monday in Asia, the price of gold rose despite the positive dynamics of the stock indices and the growth of risk appetite among investors. Precious metal was positively influenced by technical factors. Many investors began to close short positions after updating 1.5-month trading lows. At the same time, the local fundamental background for gold remains negative.

Demand for stocks and other risky assets on Monday rose after the publication of more positive data on the US labor market, which gave rise to optimism that the global economy could quickly recover from a sharp decline caused by harsh quarantine measures due to the coronavirus pandemic.

The highlight of the upcoming week will be the two-day FOMC meeting, which begins tomorrow. Before this event, investors are likely to exercise caution, therefore, in the coming days we expect fairly calm trading.

In the economic calendar today it is worth paying attention to the speech of the ECB President Christine Lagarde.

A pullback movement from support at the level of 1670.00 is developing on the chart. At the same time, the price has already reached its immediate target at around 1695.00, so we can expect a resumption of downward movement from current levels.

Resistance Levels: 1695.00, 1708.00, 1725.00;

Support Levels: 1670.00, 1645.00, 1610.00.

The main scenario is a decline to 1670.00 from current levels.

An alternative scenario is a breakdown of resistance at 1695.00 and an increase to 1708.00.

The current fundamental background is moderately negative. Inside the day, we give priority to shorts from the levels 1695.00 and 1708.00.

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