Gold price trying to stabilize after the three days sharp correction that marked the biggest drop in gold the last seven years. That was not a surprise as the gold rally had entered extremely overbought levels. Positive economic data from around the globe and positive news on coronavirus vaccine shifted investor’s attention from safe-haven assets to more risky assets such as equities.
Gold price digests the recent rebound ahead of the initial jobless claims data expected later on the day, that might provide new signs of the state of the U.S. economy.
While the global economic outlook remains fragile, the U.S. administration is considering a new relief package. The central banks will continue with low-interest rates until the end of the year, so the fundamentals are still favourable for gold. The correction allowed investors who missed the rally to join now the action as the risks for the global economy remain.
A weak USD also support the price of gold, and with analyst’s expectations for more depreciation of the greenback in the upcoming months, higher levels for gold is possible.
Gold Price Daily Technical Analysis
Gold price is 0.32% higher at 1,921, as the precious metal digest the recent sharp correction keeping the positive momentum above the 1,900 mark. The correction stalled at the rising trend line that started since the March lows. The recent volatile sessions have changed the critical technical levels.
Initial resistance for gold price stands at 1,923 the daily top. More sellers await at 1,949 the high from yesterday’s trading session. The next critical resistance is at 2,026 the top from August 11 session.
On the flip side, first support stands at 1,912 today’s low. More bids would emerge at 1,900 round figure and 1,863 the low from August 12. A move below the 50-day moving average at 1,833 would cancel the bullish momentum.
Gold Price Daily Chart