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Despite the recent rally in risky assets, gold prices stay close to multi-year highs registered at the start of the week. On Monday, the precious metal extended gains to $1,765, where October 2012 tops lie. The prices have retreated marginally since then but remain on the offensive these days. Today, the bullion is clinging to the $1,750 level, showing a mild bullish bias on the intraday timeframes. 

Interestingly, gold prices remain afloat even as risk sentiment looks positive amid hopes for a vaccine from the coronavirus and rapid recovery in the global economy. However, demand for high-yielding assets started to wane on Wednesday amid resurgent concerns over the possible recession globally and due to some skepticism of the effectiveness of the medicine. In other words, despite the recent rally in risky assets market sentiment remains gloomy as the fundamentals continue to point to heightened risks while rising trade tensions between the US and China add to investor worries. 

Moreover, fundamentals for the yellow metal are getting better due to massive stimulus measures across the globe as gold is considered a good hedge against inflation. As such, despite the overbought conditions, gold could extend the ascent in the longer run as the global economy will likely struggle to stage a sustainable recovery from the coronavirus crisis. 

From the technical point of view, the rally may pause in the short term before the metal receives another boost and registers fresh long-term highs above $1,770. So, investors may wait for a deeper downside correction before opening new long positions. In this scenario, the prices may retreat towards the $1,700 psychological level, or even lower to attract a new wave of demand. 

In the immediate term, the bullion may spend some time in consolidation around the current levels. The nearest support comes around $1,725 while the key resistance now lies at the above-mentioned multi-year highs. A daily close above $1,750 will be assessed as another bullish signal for the precious metal. 

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