Gold jumps to fresh multi-year tops, beyond $1820 level
- Gold gained some follow-through traction for the third consecutive session on Tuesday.
- Prospects of move stimulus from the US and Eurozone benefitted the non-yielding metal.
- The technical set-up favours bulls, albeit warrant some caution before placing fresh bets.
Gold continued scaling higher for the third consecutive session on Tuesday and spiked to fresh multi-year tops, around the $1823-24 region in the last hour.
The commodity prolonged its recent positive momentum and built on the previous day's bullish break through the $1812-14 horizontal resistance. Prospects of additional stimulus from the US and the Eurozone turned out to be one of the key factors that benefitted the non-yielding yellow metal.
It is worth reporting that the European Union finally reached a highly-anticipated deal on the €750 billion coronavirus recovery fund – aimed at aiding the region’s worst-hit economies. Moreover, the debate over a further round of economic stimulus measures is currently underway in the US Congress.
This comes amid the continuous surge in the number of new coronavirus cases in the US, which fueled concerns that the economic recovery will take much longer than initially expected. This, in turn, kept the US dollar bulls on the defensive and further boosted the dollar-denominated commodity.
Meanwhile, bullish traders seemed rather unaffected by the upbeat market mood, which tends to undermine demand for traditional safe-haven assets, including gold. The global risk sentiment remained well supported by the optimism over a potential vaccine for the highly contagious disease.
British drugmaker AstraZeneca and Oxford University said on Monday that its COVID-19 vaccine induced an immune response in all study participants that received two doses. Two other candidates also reported positive early results on the same day and boosted investors' confidence.
From a technical perspective, a sustained move beyond the $1820 level might now be seen as a fresh trigger for bullish traders. However, oscillators on the daily chart have moved on the verge of breaking into the overbought territory, warranting some caution before placing fresh bullish bets.
Technical levels to watch