Gold prices resumed the ascent after a short-lived pause seen last week. The bullion is on the rise since the start of the week, having reached the $1,800 psychological level on Wednesday. The bullion continues to derive support from the instability in investor sentiment amid the ongoing coronavirus pandemic.
The fact that the precious metal remained afloat even amid upbeat risk sentiment confirms the positive long-term outlook for prices. Now, the question is if the bullion dares to challenge the above-mentioned strong resistance area, especially as the daily RSI is about to enter the overbought territory.
On Wednesday, risk sentiment looks mixed-to-negative as apart from the spreading coronavirus, rising US-China trade tensions add to market uncertainty globally. In the longer term, investors will likely continue to buy the yellow metal that remains one of the most appealing assets in the current environment.
In the United States, the number of confirmed coronavirus cases is nearing 3 million. Furthermore, the United States saw a record number of 60,021 new cases yesterday. Elsewhere, Trump administration announced imposing travel bans on Chinese officials it says are restricting foreigners’ access to Tibet. Earlier in the day, news headlines were suggesting that Washington may undermine the Hong Kong currency peg to punish China. These developments added to the negative tone among global investors and thus lifted the safe-haven gold demand.
Besides, the second-quarter earnings season kicks off soon, making market participants more cautious as the upcoming corporate results could disappoint investors amid the ongoing coronavirus pandemic.
As such, both short- and longer-term outlook for the yellow metal remains upbeat. However, the prices may see a short-lived pullback from the current nine-year highs before another bullish attack takes place. In case of a correction, the bullion will first target the $1,795 region while a break below this intermediate support will open the way towards $1,783. In the longer term, the next upside target arrives at $1,900.