Gold declined sharply yesterday afternoon as a switch to risk on dominated markets. Rumours about a vaccination against the COVID-19 are diminishing investors’ appetite for safe haven assets. In early trading today, bullion is attempting a recovery but much of yesterday’s strong decline still needs to be absorbed by markets.
From a technical point of view, traders are watching to see if bullion can hold the key support level of $1,725-$1,730. A fall below these levels would increase chances for further declines and could make Friday’s rally a false break up. Otherwise, if the price holds on at $1,730, yesterday’s fall could be absorbed by markets and the bullish trend would slowly recover strength.
