Gold slightly grew on Tuesday morning due to a weakening dollar and continued concerns about the outlook for the global economy amid an ever-increasing number of COVID-19 cases.
The United States, Russia and France have all recorded a record number of daily COVID-19 cases. The virus continues to spread actively in other European countries. Some of them were forced to introduce new quarantine measures to contain the spread of the epidemic. Concerns about the potential economic impact of these measures are forcing investors to give preference to traditional defensive assets.
In the US, negotiations on a new economic aid program appear to have stalled. White House economic adviser Larry Kudlow stated on Monday that no progress has yet been made in the talks. Against this background, investor interest in the dollar has dropped significantly. Uncertainty ahead of the US presidential elections and weak data on the housing market published on Monday also have a negative impact on the US currency. Gold retains a close inverse correlation with the dollar, so today the metal was able to win back Monday's losses and move into the green trading zone.
In the economic calendar today, the focus will again be on data from the United States. The publication of a report on orders for durable goods and an index of consumer confidence from SV is expected.
The bears were unable to push through the support at 1892.00 yesterday. The price remains in the flat channel of 1892.00 - 1930.00. As part of the flat trend, we expect a moderate upward movement to the 1930.00 mark.
· Resistance levels: 1930.00, 1937.00, 1967.00.
· Support levels: 1892.00, 1875.00, 1867.00.
The main scenario - growth to 1930.00.
An alternative scenario - a breakdown of support at 1892.00 and a decline to 1875.00.
The current fundamental outlook is moderately positive. We consider longs near the level of 1900.00.