For the second day in a row, gold prices are moving in a limited range amid an upward momentum between the $1756 an ounce and $1766 after recent gains pushed it towards the $1780 resistance, its highest level after nearly eight years. The recent sharp losses in global stock markets and investor’s risk aversion with a second wave of the Covid-19 epidemic were crucial factors for the recent yellow metal gains. Gold gains were temporarily halted as the strength of the US dollar resumed amid rising new cases of coronavirus in several US states. Despite the uncertainty about the recovery amid rising infection numbers in recent days, the bleak outlook for the economy, and the latest data showed a lower-than-expected drop in unemployment claims, gold prices have retreated slightly.

Silver futures for July rose by $0.225 to settle at $ 17.89 an ounce, while copper futures for July settled higher by $0.0125 at $ 2.6630 a pound.

Data from the US Department of Labor showed that first-time claims for US unemployment benefits fell to 1.480 million, a decrease of 60,000 from the previous week's revised level of 1.540 million. Economists had expected unemployment claims to drop to 1.300 million from the 1.508 million that was announced the previous week. This was the 12th consecutive weekly decline.

A report by the Commerce Department showed that US economic activity declined in the first quarter and was not revised from previous estimates. The report said that real GDP fell by -5% in the first quarter, unchanged from estimates submitted last month, and in line with expectations. This is another indication of the damage caused by the epidemic. The economy is expected to contract by approximately 30% in the current quarter. This would be, by far, the worst quarterly contraction since records began in 1948. Economists expect a rapid return in the second half of the year, albeit not enough to reverse all the damage.

Another report from the Commerce Department said that new US durable goods orders rose by 15.8% in May after falling 18.1% in April. Economists had expected durable goods orders to rise 10.9%, compared to a 17.7% decrease reported for the previous month. This reflects a recovery in some commercial activities. However, the pace of orders and shipments remains well below pre-epidemic levels. With the exception of the fluctuating transport industry, the so-called basic demands increased only modestly, reflecting slow commercial investment.

According to the technical analysis of gold: the general trend of the gold price is still bullish as long as it moves above the 1700 resistance and as long as there are increasing numbers of Coronavirus cases that threaten the future of opening the global economy. Moving above the $1775 resistance will support the move to $1800 psychological resistance. Taking into consideration the technical indicators' which are in overbought areas awaiting a sharp profit-taking sales at any time, especially if the market fears of a second Covid-19 wave were contained. The closest support levels for gold are now 1754, 1746 and 1730, respectively.