Gold prices drop due to the strength of the dollar
Gold was trading lower on Wednesday due to a recovery in market sentiment, the strength of the dollar, and the attention the stock market is receiving. However, the XAU/USD is maintaining levels close to $1,725.
The encouraging data on retail sales in the United States, which offered a historical growth of more than 17% in May, is improving market sentiment quickly.
Advances in potential coronavirus vaccines also help, and in fact, serve to ease the turbulence created by the rise of COVID-19 cases worldwide.
The market is now operating with risk appetite and is awaiting the Bank of England’s interest rate decision.
Brazil approaches one million coronavirus cases
The new wave of the coronavirus pandemic continues to advance. According to the latest update from the John Hopkins University, globally, the number of infected cases is already close to 8.2 million. The deaths already count more than 444 thousand people.
The most affected country continues to be the United States, which is already experiencing an increase in the average of new daily cases. So far, the US has confirmed more than 2.1 million people are infected and have had almost 117 thousand deaths.
Brazil is the second most affected country, with 923 thousand cases and more than 45 thousand deaths.
Gold tests 1,715, 50-day moving average
Even though gold was trading lower on Wednesday, and the precious metal was trading below $1,725, XAU/USD remains close to that fundamental level. At the moment, one ounce of the metal is being exchanged for 1,716.70. This represents a decrease of 0.60% on the day.
On the medium-term chart, XAU/USD is testing support of 1,714.00. The moving average of the last 50 days is located here as well. In general, the metal is moving in a range between 1,680 and 1,740.
In the long term, analysts think that silver prices will outperform gold.
Silver maintains its price range
Silver was trading sideways on Wednesday after recovering from a sharp drop on Monday and operated in consolidation mode on Tuesday. Currently, XAG/USD is moving between $17.30 and $17.50 and registering a slight decrease of 0.05%.
The white metal prices are likely to head slightly downwards.
The metal is around the 16.90 territory, where the 200-day moving average is located. On the upside, short-term resistance is at 17.50. Then it is on 18.20 and 18.40.
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