• Gold bugs are clearly having a good Easter week as the precious metal breaks the previous wave high.
  • The next distribution area looks like it could be a tough nut to crack. 

Fundamental backdrop

There has been a shift in gold over the last few weeks which had led to the precious metal pushing higher. It seems ever since the weekly jobless claims data came, one of the main themes of the COVID-19 trade is that the safe haven reality kicked in. Putting this into context, stocks have still been on the rise but its the US dollar that has pulled back. Previously the USD became the safe-haven asset of choice as a scramble of cash ensued. Now that moment has passed the reality is settling in and gold is soaring.

This week will be once again dominated by the coronavirus pandemic. Despite that, there are some great data points to keep an eye on. The UK get their latest employment data for February, although this is not the best reflection of the extent of the issues the UK economy is facing due to aforementioned crisis but it will give us some clues. That is not it from the UK as the latest retail sales print for March will be a great indicator of the economic health in this difficult time. 

From Germany, we get the latest manufacturing number for April. Last time out the reading came in at 45.4, still in contractionary territory and the April forecasts are even worse (39.6). The German IFO reading will also be interesting as the research institute will give us a breakdown of the latest stats in their report. 

Gold weekly chart

Looking closer at the weekly chart, the price has broken the last wave high at USD 1703.27. This is a great sign as there is now another higher high higher low printed. The next major wave high is the blue horizontal line around USD 1800.00. Beyond that, the next major high is the red line at USD 1912.14 and that one is the all-time high. If you look closely at the technical indicators the RSI is showing a bearish signal called divergence and this indicates the upside momentum might be slowing down. If you are long I don't think its a strong enough reason to close out your positions but its just something to be aware of. On the lower timeframes, there could always be a short term pullback and that may be an opportunity to jump in the trend. 

Gold breaks previous wave

Additional levels

XAU/USD

Overview
Today last price 1709.54
Today Daily Change 25.20
Today Daily Change % 1.50
Today daily open 1684.34
 
Trends
Daily SMA20 1587.32
Daily SMA50 1599.54
Daily SMA100 1556.37
Daily SMA200 1519.05
 
Levels
Previous Daily High 1690.42
Previous Daily Low 1643.82
Previous Weekly High 1690.42
Previous Weekly Low 1609.15
Previous Monthly High 1703.27
Previous Monthly Low 1451.3
Daily Fibonacci 38.2% 1672.62
Daily Fibonacci 61.8% 1661.62
Daily Pivot Point S1 1655.3
Daily Pivot Point S2 1626.26
Daily Pivot Point S3 1608.7
Daily Pivot Point R1 1701.9
Daily Pivot Point R2 1719.46
Daily Pivot Point R3 1748.5

 

 

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