XAU/USD outlook: Gold rises to the highest level in nine years, all-time high at $1920 in focus
GOLD
Spot gold accelerated higher and hit new nine-year high ($1841) on Tuesday, following daily gain of 1.2%. The yellow metal shines on weak dollar and expectations of more stimulus measures in order to further boost recovery of global economies, hit by coronavirus pandemic. Extension of steep uptrend from $1160 (Aug 2018 trough of larger recovery from $1046, Nov 2015 low) hit the highest levels since Sep 2011 today. Breach of pivotal $1800 zone ($1795, former high of Oct 2012 / $1800 – round-figure barrier) generated strong bullish signal and opened way towards $1920 (record high, posted in Sep 2011), unmasking also psychological $2000 level. Demand for safe-haven gold remains strong, as the pace of global recovery is so far under the expectations as new wave of virus infections, raises global concerns and slows recovery process. Bulls face no obstacles en-route to $1920 target, but overbought studies on daily and weekly charts suggest that rally may take a breather and position for final push towards $1920. Dip-buying remains favored strategy, with broken $1800/$1795 barriers expected to ideally contain. Only dip below rising 20DMA ($1792) would sideline bulls for deeper pullback.
Res: 1841; 1850; 1856; 1863
Sup: 1818; 1805; 1800; 1795
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.
