Gold Price Analysis: Bounces from $1,670, but bias remains bearish


  • Gold's daily chart is flashing a bearish candlestick pattern. 
  • The yellow metal is stuck in a falling channel on the hourly chart. 

Gold is currently trading near $1,678 per ounce, having printed a session low of $1,670 an hour ago. 

The bias remains bearish despite the price bounce, as the hourly chart bearish channel is intact. Additionally, the daily chart is reporting a bearish doji reversal pattern, which comprises a doji candle near or at market tops, a sign of bull fatigue, and a bearish follow through in the form of a red candle on the following day. 

The yellow metal created a doji candle on Thursday and fell by over 2% on Friday to confirm a bearish doji reversal. 

All in all, the path of least resistance appears to be on downside and prices could fall to $1,650 in the short-term. That said, the long-term bias remains constructive with the metal likely to pick up a bid on potential coronavirus-led risk aversion. 

Many observers believe the stock markets are not out of the woods yet and could face renewed selling pressure due to ever strengthening prospects of a prolonged economic downturn, strengthening haven demand for the zero-yielding metal. 

“Just one of the reasons is the stock market crisis. During times of uncertainty, precious metals shine. For many young investors, this is the first time they have experienced sharp drawdowns in their passive, index driven portfolio. In the months to come, we expect these young investors to appreciate the capital preservation powers of precious metals,”  said Ken Lewis, CEO of OneGold & APMEX. 

As of Friday, the S&P 500 was reporting over 25 percent gains on the low of 2,192 registered on March 24. 

Hourly chart

Daily chart

Trend: Bearish

Technical levels

XAU/USD

Overview
Today last price 1678
Today Daily Change -5.86
Today Daily Change % -0.35
Today daily open 1683.62
 
Trends
Daily SMA20 1638.62
Daily SMA50 1613.85
Daily SMA100 1569.03
Daily SMA200 1526.76
 
Levels
Previous Daily High 1718.99
Previous Daily Low 1679.7
Previous Weekly High 1747.82
Previous Weekly Low 1679.7
Previous Monthly High 1703.27
Previous Monthly Low 1451.3
Daily Fibonacci 38.2% 1694.71
Daily Fibonacci 61.8% 1703.98
Daily Pivot Point S1 1669.22
Daily Pivot Point S2 1654.81
Daily Pivot Point S3 1629.93
Daily Pivot Point R1 1708.51
Daily Pivot Point R2 1733.39
Daily Pivot Point R3 1747.8

 

 

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