Spot gold extended strong rally of last Thu/Fri (up 1.54%) on Monday and hit new highest level in more than three months ($1855), lifted by fresh safe -haven demand over worries on surging coronavirus cases in some Asian countries and weaker dollar.
Last week’s stronger than expected US inflation figures also contributed the price rally as the metal is sed as a hedge against rising inflation.
Fresh advance broke above previous high at $1845 (May 10) and probe through 200DMA ($1847), exposing next strong barriers at $1871/75 (weekly cloud top / 50% retracement of $2074/$1676 descend) violation of which would boost bullish stance and open way for $1900+ gains.
Traders turn their focus to the minutes of Fed’s last meeting, due on Wednesday, to get more clues about the central bank’s next steps.
Although the US consumer prices rose above expectations in April that would generate an initial signal of the start of gradual reduction of bond purchases, strong fall in new jobs creation in April points to still fragile US labor market that makes quite unlikely scenario of any Fed’s action soon.
Res: 1855, 1871, 1875, 1885.
Sup: 1847, 1840, 1834, 1828.
