Gold Price Analysis: Potential Fib targets lower down are now active

Fundamental backdrop

Equities were on the back foot earlier in the session after US President Donald Trump went on the offensive yesterday saying that "China could have stopped the COVID-19 plague". This comment among others sent Asian bourses lower, there are also some suggestions that Chinese companies may be delisted from the US indices and this could mean some strong capital outflows. According to Reuters sources, Baidu are already looking to delist from the Nasdaq index to boost their valuation. 

The US market has now opened and managed to push higher despite some of the negativity from Asia and the EU. The major indices have subsequently moved into the red and gold has also pushed to the downside despite the negative risk tone. The US dollar index has managed to move higher after three negative sessions and currently trades 0.22% higher on Thursday

Fed's Williams has also been on the wires today saying that it is the central banks view that negative rates are not the right tool. He then went on to say the goal is to keep rates low to support the economy but not have them go negative. Today the market also received the latest US initial jobless claims data which printed at 2.483 million just slightly higher than the 2.400 million expected by analysts but firmly within the high low estimates.

Technical picture

There has now been a confirmation that the price is headed toward a lower zone. The price waves on the hourly chart have now made a lower high lower low pattern. This now activates lower support zones. More specifically the 61.8% zone matches up with the 161.8% wave extension to create a very strong zone. If the price continues to move to the downside then the level would be a potential zone where the bulls might step back in. 

There is also the issue of the black trend line in the way. The price would need to break that before getting to the aforementioned support level. The Relative Strength Index indicator is in an extremely oversold zone. This could mean that the price might pullback in the near term before moving lower later on down the line. 

Additional levels