Gold price is presently trading at 1863.36, which represents a 0.2% drop on the day after bulls failed to build on yesterday’s muted upside response to the aggressive selloff seen earlier in the week.
Renewed bids on the greenback following talk of a 30% GDP recovery in Q3 2020 is putting gold prices lower, but this could all change if the comments of a lawmaker about Democrats working on a $2.4 trillion coronavirus stimulus package are anything to go by.
Talk of a renewal of stimulus talks has kept sellers on the fence in the meantime. Renewal of the stimulus is a move which could weaken the greenback dramatically, providing gold bulls with an opportunity to retest August’s highs.
Technical Outlook for Gold Price
The decline towards 1862.14 is a consequential breakdown from the descending triangle pattern on the daily chart. However, I still feel we may not have attained the price projection point yet.
A move to 1821.55 may complete the measured move. Supporting this notion is the height of the breakdown move, which is still shorter than the triangle’s base, and the fact that Wednesdays’ descent breached the 1869.39 support. Thursday’s candle and that of today have formed hammers, both with closing prices below this support area. Gold price may resume the decline if these circumstances play out.
Only if today’s candle closes above 1869.39 will this notion be negated. This will then permit a possible upward retracement to 1900.76, with the triangle’s lower border at 1918.68 serving as the next upside target above that area.
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Gold Price Chart (daily)
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