Gold Price Analysis: Next up USD 1700 per ounce as upside targets keep getting hit

The price of gold shot higher today after another round of high jobless claims data.
USD 1700 is the next logical target for the bulls and technical levels have been working nicely.

Rajan Dhall, MSTA FX Daily

Fundamental backdrop

Gold moved another wave higher even as stocks rallied today following the news that 6.606 million new jobless claims had been made over the last week. This is the 3rd week in a row the number has come higher than forecasts but the number was marginally lower than the 6.867 million last week. There was also the news that the Federal Reserve will add an additional action to provide up to USD 2.3 trillion in loans to support the economy they went on to say they will keep monitoring markets to see if more help is needed

The precious metal has been in serious demand as the damage from the economic shutdowns is being felt in the US. The dollar index is currently 0.66% lower on the session and this is really helping the boost in the yellow metal.

In terms on today's latest COVID-19 numbers:

Italy COVID-19 cases rise 2.9% to 143,625 (Prev. 139,442). In the UK COVID-19 the death toll rose 12.4% to 7,978 (prev. +15.2% at 7,097) and lastly, in New York COVID-19 death toll rises by 12.7% 7,067 (prev. +14.2% at 6,268).

So we are seeing a fall in the EU now but the UK and US are struggling to get a handle on these numbers and it seems they might not be at the peak just yet. Despite this, there are still issues coming out of the Eurogroup meeting with Chief Centeno tweeting "we are very close to an agreement". May I remind you many of the delegates said something similar yesterday.

Technical picture

Gold has been conforming very nicely to the technicals of late and Elliott Wave and Fibonacci have been partially useful. In this recent up wave, the price has followed the 5 wave pattern higher to the letter. The only issue is now that we could be leading into a massive wave 3 with the sud divided waves in the middle. If this does end up being the case the bull targets will be way above the USD 1700 resistance level that is next on the hit list.

On this 4-hour chart below the price has moved into the ascending triangle pattern. There is a serious probability that the price could accelerate beyond the pattern to the upside but then the top of the pattern could be used as support. The 161.8% extension target has not been met just yet so keep an eye on a small short term pullback there. The red rectangle was the 76.4% retracement and once broken the market used the level as a support zone.

The longer-term Fib extension targets measuring the wave from USD 1703.27 to 1451.30 take the 138.2% extension to near USD 1800 and the 161.8% close to USD 1860.00. In the future is the price continues to rise these levels need to be watched.

Additional levels

XAU/USD

Overview
Today last price	1686.22
Today Daily Change	40.74
Today Daily Change %	2.48
Today daily open	1645.48

Trends
Daily SMA20	1581.93
Daily SMA50	1597.4
Daily SMA100	1554.17
Daily SMA200	1517.71

Levels
Previous Daily High	1657.14
Previous Daily Low	1641.78
Previous Weekly High	1636.13
Previous Weekly Low	1568.46
Previous Monthly High	1703.27
Previous Monthly Low	1451.3
Daily Fibonacci 38.2%	1647.65
Daily Fibonacci 61.8%	1651.27
Daily Pivot Point S1	1639.13
Daily Pivot Point S2	1632.77
Daily Pivot Point S3	1623.77
Daily Pivot Point R1	1654.49
Daily Pivot Point R2	1663.49
Daily Pivot Point R3	1669.85

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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