Gold price crosses $1,800 as safe haven demand rises
Gold price rose to an intraday high of $1,800 as traders remained concerned about the rising number of coronavirus cases and death rate in the US. The metal has recently benefited from safe haven appetite due to the COVID-19 pandemic. This global crisis has led central banks to slash interest rates to historic lows and buy trillions worth of assets. Therefore, the rising cases mean that rates will remain low and that stimulus will continue. Also, gold has been supported by rising inflows into gold-backed ETFs. According to the World Gold Council, these inflows have jumped for the seventh consecutive month.
The Swiss franc was little changed against the US dollar after the State Secretariat for Economic Affairs (SECO) released better-than-expected unemployment data. The numbers showed that the unemployment rate in Switzerland declined from the previous 3.4% to 3.2%. In total, about 150,289 unemployed people registered with the regional employment centres in June. That was 5,700 less than those who registered themselves in May. These numbers show that the Swiss economy is making progress as the number of new coronavirus cases decline.
The US dollar was little changed today as traders reacted to the latest mortgage data from the country. The data showed that mortgage rates declined last week. The average 30-year mortgage rate fell to 3.26% from the previous 3.29%. The number of mortgage applications rose by 2.2% after falling by 2.2% in the previous week. The mortgage market index, an important number for traders to keep an eye on, rose from the previous 758.9 to 775.9. These numbers show that there is a demand for houses as the country tries to reopen. Still, the rising coronavirus cases and increasing death rate could temper this growth.
The EUR/USD pair is trading at 1.1286, which is slightly above the ascending trend line that is shown in white. The price is above the 50-day and 100-day exponential moving averages and is slightly above the 23.6% Fibonacci retracement level. The price is slightly above the middle line of the Bollinger Bands. The pair is likely to continue rising as bulls attempt to retest the previous high of 1.1346.
The XAU/USD pair is trading at 1,803.30, which is the highest it has been since 2011. On the daily chart, the price is above the short and medium-term moving averages while the RSI has moved closer to the overbought level. The signal and main line of the MACD is also rising. That means that the pair will likely continue rising as bulls attempt to test the next resistance level at 1,900.
The USD/CHF pair is trading at 0.9410, which is slightly above this week’s low of 0.9380. The pair is trading below the 50-day and 100-day exponential moving averages. The RSI has also been falling. Most importantly, the pair is trading below the 23.6% Fibonacci retracement level. Therefore, the pair is likely to continue falling as bears target the next support at 0.9373.