Gold Watch

Gold traded last week in a range of nearly $110 an ounce and fell $90 from the week before. With coronavirus infections rising rapidly again in most European countries, restrictions have returned, pressuring the euro and risk assets. The result was high demand for the dollar as a safe-haven currency, while gold sank to a two-month low. But the dollar’s gains, and gold’s losses, were capped by concern about the cost of the next US stimulus plan, estimated at $2.2 trillion. The afternoon fixing on Friday in London was $1,859.70, compared with $1,950.85 a week earlier.

The trend is sideways down, and while selling has slowed, buying interest is weak. The strategy is to speculate on short-term swings. Sell if the price cannot break the resistance at $1,890 and $1,906, and buy if the price drops to the supports at $1,847 and $1,816. If the price can consolidate above these levels, it should rebound in the short term.