Gold prices are now trading below the $1900 mark after renewed stimulus hopes and talks of airline bailouts hit the market. US President Donald Trump tweeted his support for a $25 billion Airline Payroll Support package this Thursday afternoon, which was well received by the US markets.
Despite comments from US House Speaker Nancy Pelosi on Thursday that there would be no airline bailout bill in isolation from a comprehensive coronavirus relief bill, markets are taking solace that such discussions are even taking place. US President Trump had cancelled these talks two days ago as per a tweet, but appears to have walked back on those comments in a Fox Business program as he spoke of “some very productive talks”. These words soothed the nerves of investors and caused some risk-on market effect that has cooled gold prices.
Earlier today, Easyjet posted its first-ever loss in its 25-year history and called on the US government to save the airlines amid the coronavirus pandemic. Its stocks fell 2.98%, but this did not dampen the risk-on sentiment in the markets, which also got a boost from lower initial and continuous jobless claims data. Consequently, gold price remains under pressure and is battling to stay within reach of $1900 this Thursday.
Technical Outlook for Gold Price
Price action on the XAUUSD chart shows gold price continuing to form lower highs. The drop below 1900 on Tuesday has been followed by a pullback. This pullback has so far has been resisted at the 1900.76 price level. A retreat from this level targets 1869.39, which serves as the immediate target to the south. A breakdown below this level which carries on below the 78.6% Fibonacci retracement at 1850.29, establishes lower lows, which confirms the trend reversal and opens the floodgates to the south that targets 1821.55 and possibly 1788.90.
On the flip side, a recovery beyond 1900 continues to 1918.68. This upside move must clear the descending trendline resistance to target 1940.15 as well as 1954.77. Only a break of price above the all-time high of 2075.14 re-establishes the long-term uptrend, but this looks quite a distant proposition at the moment.
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XAUUSD Daily Chart
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