Gold prices on the XAUUSD pair spiked this afternoon, as risk aversion continues to floor the markets and make safe-haven assets more attractive.
Concern by investors about the new surge in coronavirus cases across the world and especially in the US, where 40,000 new cases were diagnosed on Thursday, is dampening global markets and spurring renewed interest in safe-haven assets.
In the last 2 hours, gold price saw a renewed surge after reports that Texas Governor, Greg Abbott, had cancelled further reopening processes as states in the south of the country see more coronavirus cases on a daily basis.
Gold price action on the 1-hour chart shows a classical stop-hunt activity by institutional players, where price action on the XAUUSD was forced down from today’s intraday highs, all the way below the 1754.12 intraday support levels. As price kept pushing its way below 1749.94, taking out stops below it, support emerged at the 200-day simple moving average line, with a spike that has seen gold price move from 1746.54 to the previous intraday high at 1768.48.
If the price can get new momentum to the upside, we may see a further challenge of this area. If price breaks above this point, the R2 pivot at 1771.88 becomes the new target. Multi-year highs at 1779.38, attained on June 24 and previously seen in 2012, remains a viable upside target.
On the flip side, retreat from 1768.48 retests intraday support areas at 1759.94 and possibly 1754.12. A breakdown of the R1 pivot at 1757.70 allows 1746.54 to come back into view.