Gold Price Analysis: Gold stalls due to the positive risk tone and fails to capitalise on the weaker US dollar

Gold trades 0.60% lower despite a fall in the USD at the start of the week.
The risk environment is positive as all the major bourses trade higher.

Rajan Dhall, MSTA FX Daily

Fundamental backdrop

Risk sentiment is positive at the start of the week as all of major Asian, EU and American bourses trade higher. Gold has fallen today off the back of the aforementioned risk tone and failed to capitalise on the weakness in the greenback (USD). In the FX world, the US dollar underperformed especially against the EM currencies. USD/ZAR is down almost 1%, USD/INR and USD/RUB are both negative on the session too.

It seems that the fact that more countries have plans to open their respective economies is one of the main factors in the positive mood. Although, New York mayor Cuomo has said the state will not be ready to even look at opening some parts of the area till the middle of May. Italy which is been the second most affected country has announced their plans to reopen more of their economy too.

Italy COVID-19 cases rise by 0.9% to 199,414 (prev. +1.2% at 197,675) and the death toll rises 1.3% to 26,077 (prev. +1.0% at 26,644).

The UK COVID-19 death toll rises to 21,092 (prev. 20,732) and deaths rise by 360 (+1.72%) vs. the previous increase of 413 (+2.03%).

Technical Picture

Gold has once again pulled away from the recent wave high and has posted a lower high wave. The price waves are circled in black on the 4-hour chart below and as you can see the peaks are falling steadily. The key support level is now USD 1661.18 as if it breaks it will make a lower high lower low pattern.

Interestingly, the first retracement stopped very close to the 76.4% Fibonacci retracement. This means that this move lower could be the start of a new Elliott Wave pattern to the downside. If this is the case a break of USD 1661.18 would be the 3rd wave and this move lower could potentially lead to a deeper retracement.

As this is a 4-hour chart it could take a few days to materialize and at the moment the 55 exponential moving average and USD 1700 psychological level are working well to support the price. All of this bearishness could be negated if USD 1739.00 gets broken to the upside to if you are looking for a resistance that would be the level to keep an eye on.

Additional levels

XAU/USD

Overview
Today last price	1714.5
Today Daily Change	-14.14
Today Daily Change %	-0.82
Today daily open	1728.64

Trends
Daily SMA20	1669.97
Daily SMA50	1627.82
Daily SMA100	1581.03
Daily SMA200	1533.99

Levels
Previous Daily High	1736.52
Previous Daily Low	1710.68
Previous Weekly High	1739
Previous Weekly Low	1661.18
Previous Monthly High	1703.27
Previous Monthly Low	1451.3
Daily Fibonacci 38.2%	1720.55
Daily Fibonacci 61.8%	1726.65
Daily Pivot Point S1	1714.04
Daily Pivot Point S2	1699.44
Daily Pivot Point S3	1688.2
Daily Pivot Point R1	1739.88
Daily Pivot Point R2	1751.12
Daily Pivot Point R3	1765.72

Author

Rajan Dhall, MSTA

FX Daily

Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.

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