Gold Price Analysis: Trapped in descending triangle amid risk-off


  • Gold is being squeezed in a triangle pattern amid recession fears and risk aversion. 
  • A breakout would put the bulls in a commanding position, yielding notable recovery rally. 

Gold is struggling to shine amid fresh risk-off in the markets with prices trapped in a descending triangle pattern on the 4-hour chart. 

So far, the top end of the triangle, currently at $1,508, has proved a tough nut to crack. A breakout would imply an end of the sell-off from recent highs above $1,700 and could yield a rally to $1,550.

Alternatively, a triangle breakdown would suggest a continuation of the sell-off from $1,700 and expose support located at $1,445 (November low). 

At press time, the yellow metal is changing hands at $1,496 per Oz, representing a 0.11% drop on the day, even though the futures tied to the S&P 500 index are down 5%. 

"An economic tsunami has been unleashed. A consensus appears to be emerging among economists of the largest contraction in global GDP in a generation," according to Marc Chandler, Chief Market Strategist, Managing Partner, Bannockburn Global Forex.

Even so, gold is down 5.6% on a month-to-date basis, possibly due to the global dash for the US dollar. The greenback has become a preferred safe haven and the dollar index has gained over 4% so far this month. 

4-hour chart

Trend: Bullish above $1,508

Technical levels

XAU/USD

Overview
Today last price 1495.74
Today Daily Change -3.32
Today Daily Change % -0.22
Today daily open 1499.06
 
Trends
Daily SMA20 1596.02
Daily SMA50 1582.85
Daily SMA100 1535.3
Daily SMA200 1503.19
 
Levels
Previous Daily High 1516.19
Previous Daily Low 1455.54
Previous Weekly High 1561
Previous Weekly Low 1451.3
Previous Monthly High 1689.4
Previous Monthly Low 1547.56
Daily Fibonacci 38.2% 1493.02
Daily Fibonacci 61.8% 1478.71
Daily Pivot Point S1 1464.34
Daily Pivot Point S2 1429.61
Daily Pivot Point S3 1403.69
Daily Pivot Point R1 1524.99
Daily Pivot Point R2 1550.91
Daily Pivot Point R3 1585.64

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD holds steady around 0.7130 post-upbeat Aussie CPI

AUD/USD is in stasis above 0.7100 even as Australia's Q3 CPI beats estimates. The data is unlikely to deter the RBA from postponing additional easing. With coronavirus cases rising across the globe, the RBA is likely to cut rates next month.

AUD/USD News

USD/JPY looks south with bear flag breakdown on 4H chart

USD/JPY feels the pull of gravity as risk sentiment weakens on coronavirus concerns. Deeper losses look likely, as the 4-hour chart shows a bear flag breakdown. The pattern indicates a continuation of the sell-off from the Oct. 20 high of 105.75, possibly toward 104.00. 

USD/JPY News

Gold bounces-back towards $1910 amid growing coronavirus woes

Gold attempts bids amid coronavirus woes-led risk-aversion, as the bulls fight back control amid a sell-off in the US Treasury yields, triggered by the coronavirus concerns-induced risk-aversion. The benchmark US 10-year Treasury yields drop further below the key 0.80% level.

Gold News

S&P 500 futures and Treasury yields drop on coronavirus concerns

Both the US stock futures and the government bond yields are flashing red on renewed coronavirus concerns and fading prospects of additional fiscal stimulus deal. Coronavirus concerns weigh over risk sentiment and boost demand for safe havens.

Read more

WTI falls 1.2% on inventory data

The price of oil has fallen in recent trade as the recent inventory data shows a build on stockpiles, weighing on WTI. Technically, the price is deteriorating on a daily outlook. From a 4-hour perspective, the price might be expected to ....

Oil News

Forex MAJORS

Cryptocurrencies

Signatures