Fundamental analytics

Gold maintains an upward movement vector


During Monday trading session gold continues to grow as investors reconsider their expectations regarding the prospects for the development of the global economy. Expectations of a quick recovery have fallen. According to Johns Hopkins University, more than 10 million cases of COVID-19 infection have already been reported in the world. More than 500 thousand people died from the disease.

A new wave of rising incidence is associated with the weakening of quarantine measures. In many regions of the world, authorities have tightened restrictions again. Many experts state that the United States failed to open their economy. Decisions to ease quarantine measures were hasty. Amid the worsening situation in the country, Donald Trump is rapidly losing voters' support considering that in February about 56% of voters were ready to vote for Trump and current data indicates only 39% of support.

Asian statistics did not please investors either. Retail sales in Japan continue to decline at a rapid pace. In May the indicator dipped by 12.3%, against a -13.9% drop in April.

According to data reported by China, the profit of manufacturing companies from January to May decreased by 19.3% in comparison with the same period in 2019. In May the indicator increased by 6.0% for the first time in 2020, after a decrease of 4.3% in April. Development prospects for the industrial sector remain uncertain due to falling demand.

Gloomy prospects for the development of the global economy and high uncertainty increase investor interest in traditional defensive assets. Gold still remains the main defensive asset.

Today in regards to the economic calendar it is worth paying attention to the publication of the index of incomplete sales in the US real estate market for May.

Regarding the chart, the bulls are holding the price above the level of 1767.00. The bullish price movement scenario remains a priority. The closest target is at the 1780.00 mark. In the medium term we are expecting the price to move towards the level of 1800.00.

Resistance levels: 1780.00, 1800.00, 1820.00;

Support Levels: 1767.00, 1756.00, 1745.00.

The main scenario - an increase towards 1800.00.

An alternative scenario - a breakdown of intraday support at 1767.00 and a decline to 1756.0.

The current fundamental outlook is moderately positive. We would consider longs from the level of 1767.00.

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