Gold Price Analysis: XAU/USD bulls attack $1,750 amid risk-off mood

• Gold buyers refreshed monthly high before stepping back below $1,750 afterward.
• A surge in the US virus cases, Sino-American tension keeps the market’s risk-tone sour.
• Qualitative headlines, China’s PBOC rate decision will be the key for near-term direction.

Having refreshed the monthly top to $1,752.29, Gold prices ease to $1,746.80 as we write amid the early Monday morning in Asia. In doing so, the bullion prices probe the highest level since May 20. The precious metal registered notable up-moves on Friday as fears of the coronavirus (COVID-19) wave 2.0 escalated amid fresh numbers from the US. Also supporting the risk-aversion was the US-China tension and downbeat comments by Boston Federal Reserve President Eric Rosengren.

Virus, trade and many more to weigh on the risk-tone sentiment...

Considering the latest catalysts, the weekend figures from Florida suggest that the virus cases rise 3.7% over a seven-day average of 3.5% whereas numbers from Texas, Oklahoma and California are also on the spike off-late. T risk of the pandemic was also backed by White House Adviser Peter Navarro during the CNN interview over the weekend.

Additionally, China cited the deadly disease as the reason for turning down meat imports from Tyson, one of the biggest poultry companies in the US. On the contrary, the US State Department suggested that the Secretary of State Mike Pompeo discusses steps that the US and its allies are taking to counter the Chinese Communist Party’s challenge to democracies around the world. It should also be noted that Axios recently came out with the news suggesting US President Trump held off sanctions on Xinjiang to have a trade deal with China.

Other than the top-notch catalysts, geopolitical tension in Korea and the terrorist attack in the UK, which killed over 3 people, also weighs on the market’s risk-tone sentiment.

As a result, the S&P 500 Futures drop 0.70% to 3,037 as we write. It should also be noted that Wall Street benchmarks have marked downbeat prints off-late while the US 10-year Treasury yields also slipped below 0.70% during the latest fall on Friday.

Although the virus and Sino-American tension are likely to remain as the key catalysts, speech from the RBA Governor Philip Lowe and the People’s Bank of China’s (PBOC) rate decision can offer additional directives.

Technical analysis

A sustained break above $1,745.12 enables the bulls to aim for May 20 top near $1,754 ahead of targeting the May month peak surrounding $1,765. On the downside, an ascending trend line from March 20, at 1,717 now, becomes the key near-term support to watch during the bullion’s pullback.