The gold price has weakened 0.54% on a weekly basis but managed to close above the $1800 level. This precious metal’s price still remains under pressure, but concerns that the fast-spreading Delta variant could hit the economy may help Gold to advance again above $1850 resistance.Fundamental analysis: Gold should advance if the situation with pandemic get worse
Gold price continues to trade above $1800 level, the battle against the coronavirus is still not over, and the global recovery could be hit by the fast-spreading Delta variant of the coronavirus, which could trigger new lockdowns. Gold is considered a safe-haven asset, and the price of Gold should advance if the pandemic situation worsens as investors look for safer places to invest their money.
Delta is now the dominant variant and accounts for more than 50% of positive COVID-19 samples in many countries, while the World Health Organization reported that the new variants would continue to emerge as long as the virus keeps spreading.
Despite this, the U.S. stock market continues to reach new records as better than expected second-quarter earnings and signs of economic revival fueled investor risk appetite. The U.S. economy continues to perform well, but U.S. Federal Reserve Chairman Jerome Powell said that the Federal Reserve is still waiting for improvements before changing a monetary policy.
“Powell dampened any expectations that the Fed might exit from its zero interest rate policy earlier in response to the sharp rise in inflation rates. Powell said that substantial further progress towards the Fed’s goals is still “a ways off” and that it is therefore too early to scale back its bond purchases,” said Carsten Fritsch, an analyst from Commerzbank.
This is certainly positive for investors, focusing on riskier assets, and investors will continue to pay attention to the bank’s commentary looking for any clues.Technical analysis: Gold price managed to close the week above $1800 level
Gold has weakened on a weekly basis, but the scenario for the price of Gold could be better if the situation with pandemic gets worse. Those whose interest is to invest in commodities like Gold should consider that if the Fed continues to keep the monetary policy unchanged and does not raise interest rates any earlier, Gold is likely to profit.Data source: tradingview.com
The current support levels are $1750 and $1700; $1830, $1850, and $1900 represent the resistance levels. If the price falls below $17500, it would be a firm “sell” signal, and we have the open way to $1700.
On the other side, if the price jumps above $1830, it would be a signal to trade Gold, and we have the open way to $1850.Summary
Risk aversion will likely prevail during August 2021, and if the price jumps above the $1830 level, the next target could be around $1850 resistance. Gold’s price managed to close the week above the $1800 level while the concerns that the Delta variant of coronavirus could hit the economy may help Gold to advance higher.