Gold price (XAUUSD) has gained more than $50 due to broad-based selling on the US Dollar, allowing it to push up from near-4 month lows in the process. The extension of yesterday’s recovery move followed the completion of the breakout move from the bullish flag pattern on the hourly chart.
Bets of a renewed coronavirus stimulus package from Congress (a USD-weakening event). However, gains in the gold price could be capped by the approval of the Pfizer-BioNTech coronavirus vaccine by the UK government. Friday’s Non-Farm Payrolls may also play an essential role in price action.
Gold price is trading at 1823.30 at the time of writing, slightly off today’s intraday high at 1832.57.
Technical Levels to Watch
Today’s price move has violated the 50% Fibonacci retracement from the swing motion of 20 November to 30 November. A confirmation of this break allows the XAUUSD pair to target the 1835.88 price level (61.8% Fibonacci retracement) before the 1850.78 resistance (24-28 September lows) comes into focus. 1869.39 and 1900.76 remain further upside targets.
On the other hand, selling into rallies that occur to any of the resistance levels mentioned above could restart the move towards the price projection point from the bearish flag’s breakdown. This move potentially takes out 1821.55, 1800.34 and 1788.90, along the way.
XAUUSD Daily Chart