Gold Price Analysis: Despite the move back above $1700 the outlook is bearish in medium term
|- The price of gold has pushed just over 1% higher on Thursday.
- This comes despite a new wave low being created on Wednesday's session.
XAU/USD 4-hour chart
The price of gold has pushed higher today as the greenback capitulated once again. Although stocks have moved higher too this time. There has been another liquidity dump in the system by the ECB as today they announce an additional EUR 600bln.
The structure of the gold chart is not as bullish as most of the indices but it is defiantly not as bearish as the dollar index. This leaves the precious metal in somewhat of a conundrum. The equity markets have seen a rotation into the stocks that fell the most during the COVID-19 pandemic (banks and airlines) and yields are starting to rise once again in the fixed income space.
Looking at the chart below there is still a lower high lower low pattern. If the USD 1750.00 per troy ounce level is broken then this pattern becomes obsolete and analysts can look for higher levels once more. Until that point, the Fib extensions on the downside could be the potential targets.
At the moment the 200 Simple Moving Average is providing some resistance and the price is also under the 55 Exponential Moving Average. The Relative Strength Index indicator has pulled away from the oversold zone allowing some more space for another move to the downside. The MACD is still very much in bearish territory as the histogram is in the red and the signal lines are under the mid-point.
-637268844697300974.png){kind=link}
Additional levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.