GOLD Poised For Rally!

Gold has decreased a little in the short term, but the current global situation caused by the COVID-19 epidemic could push the price higher anytime again. Technically, the current decrease was somehow expected as the price needs to recapture more energy before it resumes the upwards movement.

The Oil price crash could redirect buyers on gold as the yellow metal remains very attractive these days. The pandemic may slow down in the upcoming weeks, but its devastating effects on the global economy may continue for years to come, that’s why Gold is a good investment.

The gold price has decreased also because the US dollar has appreciated in the short term versus the other currencies. Gold is still in the buyer’s territory, but we need a fresh buying signal, we may have a long opportunity if the price stays above the inside sliding line (sl) and if it jumps and consolidates above the $1,700 psychological level.

You can notice on the Daily chart that the price has registered only a false breakdown with a great separation below the sliding parallel line (sl) signaling that the buyers are still in the game.

If the US Dollar drops further in the short term, Gold could start another bullish momentum and could approach new highs. Gold will maintain a bullish perspective as long as it is traded above the $1,600 level. The near term support levels are seen at the upside sliding line (ml), at the median line (ml) and lower at the downside sliding parallel line (sl1), so only a drop below the downside sliding line (sl1) and below the $1,600 level will signal a broader corrective phase.

• TRADING RECOMMENDATIONS

If Gold will bounce from the sliding line (sl) and if it closes and stabilizes above the $1,700 and above the weekly R1 ($1,702), the price should resume the upside movement. The target remains at the upper median line (uml) of the ascending pitchfork. Gold could be attracted also by the $1,800 psychological level if it stays above the sliding line (sl).

A further decrease in the short term will be confirmed if the price closes below the sliding line (sl), the next downside obstacles will be at the median line (ml) and at the downside sliding line (sl).

Gold could increase anytime after yesterday’s false breakdown and also because the current drop is still considered a temporary one as the global risk grows.

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

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