Gold Price Looking to Break Above the 1918 Mark As Stimulus Awaited
Gold price action is muted on the day, with the daily candle showing a 0.28% drop in the session. This is not unexpected. Today is the Columbus Day holiday, and there is not much happening on the economic front. This is allowing gold traders to re-evaluate their positions, as the trading week kicks off fully tomorrow.
China is back from its Independence holidays, and the People’s Bank of China hit the markets with a bang by reducing the reserve requirement ratio for financial institutions on specific foreign exchange forwards transactions. However, the greenback remained static, probably as a result of the US Dollars.
Speculators increased their net long positions in gold, taking them to 3-month highs after some worries over the pandemic and President Trump’s wealth. However, things may move on in a different direction this week when the markets reopen for trading tomorrow.
Technical Outlook for Gold Price
Today’s downside move is now testing the breached descending trendline/1918.68 support level in classical pullback-retest mode. If these support levels hold firm, gold price may bounce and aim for 1940.15. Further advance brings in 1954.77 as a new target, with 1969.95 and 1980.74 forming potential upside targets.
On the flip side, a collapse of the present support levels allows for a retest of 1900.76, with 1869.39 and 1821.55 lining up as potential downside targets.