Gold prices have leaped after the Federal Reserve has cut interest rates by a double-dose of 50 basis points in a shock move to tackle the evolving risk of coronavirus. The disease has taken the lives of some 3,000 people, six of them in the US. It has already infected some 90,000 worldwide. The illness has caused massive disruptions to supply chains.
XAU/USD is on the rise as lower US yields make the precious metal more attractive. The yellow metal carries no yield.
Resistance awaits at $1,630, followed by $1,660, and then the peak of $1,689 high which is the seven-year high.
The Relative Strength Index on the four-hour chart is below 70, allowing for more gains. Momentum is to the downside – but it is waning and may turn soon. Just above the $1,630 level, we see the 200 Simple Moving Average. Overcoming that level is critical for further gains.
more to come
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