Gold has accelerated its rally and now trading at $1,710 level, above the $1,700 - $1,703 resistance area. I've said in my latest analysis that the price is expected to increase further as the COVID-19 pandemic will continue to make damages and the global economy could step into recession. Gold remains an attractive safe-haven instrument in this risk aversion situation.
The yellow metal has managed to increase as much as $1,725.51 today, but now melting down and it could come back to test and retest the broken obstacles. The outlook is bullish and the price could approach and reach fresh new highs and new obstacles soon if it stabilizes above the $1,700 area. The USD is into a correction on the short term, so the gold increase is natural.
Gold has resumed Thursday's rally and it has ignored the $1,700 psychological level, the weekly R1 ($1,702) level and the $1,703 former high. The RSI indicator breakout has signaled another bullish momentum.
I've said yesterday that the gold price is expected to increase towards the upper median line (uml) of the ascending pitchfork after the aggressive breakout above the inside sliding line (sl - ascending dotted line) of the ascending pitchfork.
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Maybe you all wonder when you could buy gold again if you are not already long? Personally, I believe that you should stay away for now and to wait for consolidation above the $1,700 - $1,703 area. We had a good opportunity after Thursday's rally, but now we have to wait for a confirmation that it will resume the upside movement on the medium to the long term.
Gold could easily increase without consolidation and could reach the next target from the upper median line (uml) of the ascending pitchfork, but you don't want to be caught by a drop if the current breakout is invalidated. However, the outlook is bullish as long as the price is traded above the inside sliding line (sl) of the ascending pitchfork.
A consolidation above the broken resistance area could signal a further increase towards the $1,800 psychological level. I believe that only a failure to stabilize above the $1,700 - $1,703 area and a drop below the median line (ml) of the ascending pitchfork could announce a corrective phase.
The material has been provided by InstaForex Company - www.instaforex.com