Mentari Mulia Berjangka



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Independent Analyst: Thibault Moirez
Date: 30 June 2020

Gold prices are struggling to maintain buying momentum after last week’s rally. The yellow metal attracted demand as investors started to price in an additional round of monetary stimulus in light of the recent uptick in covid-19 infections in the US and elsewhere in the world.

Gold is trading relatively flat at the time of writing, gaining 0.12 percent on the day. Buyers and sellers appear to be equally matched at this price point as indicated by early signs of a doji candle forming in the daily chart, suggesting prices may break dramatically in near future.

Analysts have pointed out that gold prices appear to be trading in line with stocks recently as opposed to the traditional safe-haven flow pattern. Investors are more likely buying gold to hedge against the medium-term inflation expectations whilst looking to US Treasuries as the real safe-haven asset as evidenced by their decreasing yields in the past sessions. Trouble may lie ahead for gold should market liquidity dry up triggering a fall in global equities. Gold traders would prefer to stock up on the greenback which in turn would weigh on gold prices as we saw back in March. From a technical perspective, the 1,780 target still remains attainable though a return below the 1,765 handle seems more likely. Momentum remains in favour of the bulls as shown on the daily chart. However, should prices fail to hold above the 1,770 mark, the next support will likely only be felt around the 1,755 level along the upward trendline.

On the upside, there is not much in the chart to suggest strong gains in the short term as the 1,780 resistance level looks set to cap any large rises in the yellow metal. Traders should be cautious chasing gold prices higher at this level.

(Chart Source: Tradingview 29.06.2020)

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