Gold Price Rallies to 2012 Highs as US Coronavirus Cases Rise. What’s Next?

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Gold price is on a three-day winning streak and could extend it to a fourth day if buyers are able to sustain their momentum. As of this writing, XAUUSD is trading at around $1,794.42 which is the highest level we have seen since October 2012. What can we expect next for gold price?

As reported by my colleague Eno Eteng yesterday, the recent surge in the precious metal was driven by the rise in coronavirus cases in the US. Today, it was reported that Texas saw more than 10,000 new cases in a single day while LA county recorded its biggest daily rise at 4,015.

With our forex calendar blank for market-moving economic data from the US for the rest of the week, XAUUSD will likely continue to move according to market sentiment.

Technical Analysis

Gold Price, Monthly Chart

On the monthly time frame, it can be seen that gold price is now testing resistance at its 2012 highs. If buyers can sustain their momentum, XAUUSD could soon trade to its next near-term resistance at $1,920.60. This is where it topped in September 2011.

On the other hand, it’s worth noting that sometimes market retrace part of their gains especially after breaking critical levels. With that said, we could see XAUUSD pull back part of its recent move to around $1,787.48. This price coincides with the rising trendline (when you connect the lows of June 5, June 18, July 2, and July 7). When drawing the Fibonacci retracement tool, you can also see that this price aligns with the 23.6% Fib level. If support at this price does not hold, the next floor could be at $1,769.80 where gold price bottomed on July 6.

Gold Price, 4-hour Chart

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