Spot gold slid 1.2% on day yesterday, down for a third time in the last four trading sessions. While the latest escalation of U.S.-China tensions failed to lift up gold prices, investors’ sentiment keeps improving, amid gradual reopening of major economies.
Meanwhile, Federal Reserve Bank of St. Louis President James Bullard said he expects the U.S. economy to recover strongly in the third quarter, with jobless rate dropping below 10% by the year-end.
The Federal Reserve will release its latest Beige Book today, though investors are likely to be well-braced for downbeat assessment of the economic situation.
From a technical point of view, spot gold stays on the downside as shown on the 1-hour chart. The bearish channel drawn from May 18 remains intact and gold has broken below a longer-term rising trend line, which emerged from May 1. Bearish investors may consider $1,726 as the nearest resistance level, with prices likely to test the 1st and 2nd support at $1,703 and $1,694. In an alternative scenario, a break above $1,726 might trigger a further rebound to $1,740.