With the volatility of the COVID-19 spread, USD weakened last Monday, pushing the gold prices higher against prior resistance of $1,680, shifting to the low $1,700s.
The world acting as a catalyst sustains the strength of the yellow metal while readjusting to the US dollar movements. In the US, gold on Comex settled at $1,761.40, making it the 7-year high since October 2012. This move was more in alignment with the US stock exchanges, with both S&P 500 and DJIA plummeting.
Following gold’s jump from the 7-year high of $1,730 on Monday, a slight pullback is seen and expected to go down further to $1,703. Judging from the RSI of the hourly chart, divergence is likely to influence a bearish reversal.
However, this may be a temporary bull strain response. Therefore, a sustained decrease in prices may follow before a surge of above $1,730.
On Monday, the gold plotted a massive bullish outlook, reasserting a stronger wave from the $1,445 during March. In Asia, the USD/JPY was shifting to lows, paving the way for a bullish gold outlook.
According to analysts at TD Securities:
“Looking forward, we continue to see a set-up for a multi-year bull market being cemented, as the market is flooded with monetary and fiscal stimulus, while Fed rates are at the zero bound, which suggests investors will continue to seek gold’s warm embrace as real global rates become entrenched in negative territory,”
This further bolsters the Gold to move in an upward direction in the long run.
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