GOLD Melting Down From Resistance!

The gold price has increased as much as $1,747.64 in yesterday’s session, but it has found strong resistance and now is trading in the red. Gold is traded at $1,720 and it maintains a bullish outlook despite the minor retreat.

Gold has increased by approx 6.39% in the last three sessions, so the current drop is somehow understandable. The optimism could come back into the markets if the COVID-19 spread slows down. Technically, the bullish momentum was expected, but I’ve said yesterday that we have to wait for a consolidation above the $1,700 – $1,703 area before we go long again.

Gold could come back to test and retest the $1,700 – $1,703 broken area and the weekly R1 ($1,702) level. The bias is bullish as long as the price is traded above the inside sliding line (sl) of the ascending pitchfork.

A minor drop could give us a great chance to go long on gold as well. You can see that the yellow metal has managed to reach the upper median line (uml) of the ascending pitchfork, I’ve said in my previous analysis that Gold it will try to reach this target after the aggressive breakout above the inside sliding line (sl) of the ascending pitchfork.

The gold price has touched the upper median line (uml), but it has closed far below it signaling that the bulls are exhausted.

• GOLD TRADING TIPS

Gold could resume the upside movement if it consolidates above the R1 ($1,702) and above the $1,703 former high, the target remains at the upper median line (uml). The price could climb towards the $1,800 psychological level if it stays above the inside sliding line (sl – ascending dotted line) of the ascending pitchfork.

The price drops right now also because the USD is boosted by the USDX’s rally. Gold will register an important correction when the Coronavirus pandemic will be at the end and when the trader and investors will move their money into riskier instruments.

So, a sideways movement above the $1,700 psychological level could signal another rally towards fresh new highs. I believe that a further increase could be invalidated only by a valid breakdown below the median line (ml) of the ascending pitchfork.

The material has been provided by InstaForex Company – www.instaforex.com

Source:: GOLD Melting Down From Resistance!