XAU/USD Outlook: Gold advances to two-week high on fresh risk aversion

Slobodan Drvenica Windsor Brokers

GOLD

Spot gold advanced to the highest level in two weeks in early US session trading on Tuesday, driven by fresh safe-haven demand on renewed weakness in the stock markets and rising concerns about coronavirus epidemic negative impact on global growth.
Recovery leg from $1547 (5 Feb low) is riding on the third wave, which hit its 100% Fibonacci expansion ($1591) and requires validation on break above.
Bulls pressure strong barrier at $1593 (3 Feb high), violation of which would expose psychological $1600 level and FE 138.2% at $1603.
Bullish daily techs underpin the action, but overbought stochastic warns that bulls may face headwinds.
The notion is supported by bearish divergence of 4-hr stochastic.
Rising 10 and 20HMA's ($1584 and $1580 respectively) on 4-hr chart should contain dips and keep bullish bias.
Only return and close below $1573/72 (rising 10/20DMA's which formed bull-cross) would weaken near-term structure and sideline bulls.

Res: 1593; 1600; 1603; 1610
Sup: 1584; 1580; 1572; 1566

Interested in Gold technicals? Check out the key levels

1. R3 1588.53
2. R2 1586.18
3. R1 1583.57
PP 1581.22
1. S1 1578.61
2. S2 1576.26
3. S3 1573.65

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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