Gold Price Forecast: XAU/USD hits fresh record highs near $1950, what’s next?
- Gold bulls in complete control amid US-China escalation.
- USD sell-off extends amid coronavirus-led economic recovery woes.
- Oversold daily RSI calls for a correction in the near-term.
- Buyers still remain hopeful ahead of US Durable Goods data.
Having settled last week just above the $1900 mark, Gold (XAU/USD) kicked-off the Fed week with a bang, hitting a fresh life-time high at $1944.76. Stops got likely triggered on a break above the previous record high of $1921.14, which called for a quick $25 rally. The traditional safe-haven extends its one-week-long rally, mainly underpinned by the US-China escalation over the consular closures and coronavirus resurgence in the US. The continued rise in the virus spread across the US weighs on the economic recovery prospects keep the US dollar under pressure. Meanwhile, concerns over the impending US stimulus package also dent the sentiment around the greenback.
From a broader perspective, gold continues to benefit from the aggressive monetary easing adopted by global central banks to tackle the virus impact. The US Treasury yields tumble amid an unprecedented level of money-printing, making the non-yielding gold more attractive.
Looking ahead, the bright metal is expected to take cues from the sentiment on the global stocks and US dollar price-action ahead of fresh virus stats and Durable Good Orders release due out from the US. Also, the US stimulus progress will be closely followed ahead of the US Federal Reserve (Fed) monetary policy decision due later on Wednesday.
Short-term technical outlook
Gold: Daily chart
As observed in the daily chart, the price quickly pulled back after reaching all-time highs, thanks to the oversold Relative Strength Index (RSI) conditions. The RSI inches higher at 86 levels, calling for a further retracement.
The price could test the previous record high at $1921.14 on its move lower. The next downside target is seen at $1906.68, Friday’s high.
The daily low and the round number of $1900 will be the level to beat for the bears.
Alternatively, the bullish momentum will now regain momentum only on a break above the $1950 psychological level if the buyers surpass the latest record high.
Gold bulls have the $2000 mark on their radar, which will emerge as a big milestone in the history of gold trading.
Gold: Additional levels to consider
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Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
