Gold Price Analysis: Another day another rally - Bulls need to target USD 1747.82

Fundamental backdrop

Today has been a day dominated by economic data. First up this morning the market received the latest flash PMI numbers from some of the major nations. Australia kicked off the proceedings with poor figures especially the services PMI number which printed at 19.6 vs the previous 38.5. The news didn't get much better in Europe as once again services were hit hard in the UK and the EU. The UK figure was the worst of the day down at 12.3 vs a consensus estimate of 29. Later in the day as the US session opened up the latest Initial jobless figures. The heavily anticipated number came in and 4.427 million. This was comfortably within the analyst estimates of between 3 and 5.5 million. Lastly, the US PMI numbers came in and once again printed below analyst forecasts but no way near as bad as the UK or EU earlier in the session. 

The bad news at the start of the session sent equities lower but as the news improved into the US session the selling stopped and the bulls took control. The S&P is trading 1.58% higher and the Dax is now just over 1% in the black. Gold meanwhile is also nearly one percent higher but clearly it's a risk-on session. The dollar index reflects this trend as it has now fallen around 0.13% after trading almost 0.36% higher earlier in the session.

Italy COVID-19 cases increased by +1.4% at 189,973 (Prev. + 1.8%) and the death toll pushed +1.9% higher at 25,549 (Prev. +1.8%).

New York COVID-19 death toll rose 2.9% at 15,740 (prev. +3.2% at 15,302).

Lastly, a special mention has to be given to the BoJ. Nikkei (news agency) announced they would consider doubling up their bond-buying on both corporate and government debt. This is an amazing measure as the debt to GDP ration in the nation is at a catastrophic level already and this QE to infinity action seems to have no end. Only time will tell how this experiment will end.

Technical picture

Gold has once again pushed higher but still needs to take out the previous wave high of USD 1747.82. If this level is broken there are some key Fibonacci targets on the 4-hour chart below. The 161.8 golden Fibonacci ratio is close to the psychological USD 1800 mark so it seems to be the logical target. The price action is still looking bullish but the risk sentiment today is firmly with the stock markets. If the USD continues to weaken over the next few days then there could be a good chance one of these targets could be hit. Sentiment for the precious metal is still to the upside and the old trendline break would be negated if the wave high is broken.

Additional levels