Gold prices surged on the opening of week's trading as concern over Corona Virus second wave grew coupled with Negative Real Bond Yield.
China on the other hand has proposed its new National Security law which would allow Beijing to control over Hong kong's legal system, which is causing a growing tension between U.S. & China adding to the market's uncertain outlook. The negative real yields basically signals a bearish sentiment for Global economy's outlook, which is acting as a cause of yellow metal's continuous gain in price. As investors are finding Gold much more attractive than Treasuries, which would be giving a negative return. The latest U.S. CFTC reports also suggests that Long position on Gold has significantly increased among large Institutions. Goldman Sachs is already forecasting that Gold will hit $2000 an ounce, while J.P. Morgan Chase & Co. said to stick with bullion as it is most leveraged to a low real yield environment.
Technically, the first biggest barrier for Gold would be to get above the $1765 region mark. As there has been quite a big resistance around the region in recent days. Once we see a break above, we can easily target $1800 handle as there is no major price points in-between. The bollinger bands on the daily time frame is also becoming narrow, which signifies a price break above or below, with fundamentals indicating a price surge in this case.