Gold Reassert An Uptrend – India

  • 2 months ago
  • news
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The MCX is inching higher and the trend has been bullish on hopes of more coronavirus relief package by the US government. Also, the possibility of a Brexit without an EU deal, rising COVID cases in the US and Europe and extension in the shutdowns by the UK have been supporting the uptrend in gold.  

The US Senate Majority Leader Mitch McConnell said an agreement had been reached by congressional leaders on a roughly $900 billion COVID-19 relief bill. The package includes $600 direct payments to individuals and a $300 per week unemployment compensation supplement, to a $1.4 trillion spending bill funding government programs through September 2021. But it has not been officially signed. So if things continue on this path and nothing gets in the way, the voting will happen this week itself and hopefully, a deal will be closed.

This optimism over the passage of the bill is being reflected in gold’s trend. However, there are some concerns in the gold market. One is fuelled by worries over the trend in . A short-covering in the dollar may lead to selling pressure in dollar-denominated gold. Also, traders are riding a wave of vaccine rollout. Moderna Inc’s COVID-19 vaccine is set for regulatory approval this week after the US Food and Drug Administration staff endorsed it as safe and effective. So the approval of a second COVID-19 vaccine will be the downside risk to gold. 

As seen in the MCX Gold daily chart, the Falling Wedge Pattern is in the process of formation whose breakout level is at around 50930. Currently, prices are hovering near a crucial resistance zone of 50900-50930 which is 100-days moving average mark as well as 38.2% Fibonacci retracement level. Once prices breach and sustain above 50950 then doors will be opened for 52500-53000 and then 54400. On the downside, 50100 is the crucial support of 50-days moving average and then at 49250-48600-47700.

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