The gold price continues lower after Friday’s sharp decline as U.S. dollar gains momentum while investors sentiment has improved after the plan by President Trump to reopen the economy. Gold price last week hit eight-year highs as the coronavirus confirmed cases surpassed over 2 million people. Recession fears boosted gold price as dismal economic data coming from around the globe. IMF expects that the global economy might contract by three per cent in 2020.
Demand for physical gold drops as most of the retail stores are closed in India and China, but speculators increased the bullish positions in COMEX according to U.S. Commodity Futures Trading Commission (CFTC).
Gold price is 0.20% lower at $1,680 trading at one-week lows after on Friday lost over 2%. The technical outlook is still bullish despite the recent correction from eight-year highs. Bulls are comfortable as long as the price holds above the 1,650 mark.
On the downside, first support for gold stands at $1,671 the daily low. If the gold price breaks below, the next support area will be met at 1,744 the low from April 9 trading session. Next support zone will be reached at 1,612 the 50-day moving average.
On the other side, initial resistance for gold price stands at $1,684 the daily high. More selling pressure might emerge at $1,718 the Friday’s high. A break above would test the eight-year highs at 1,746 from April 14.