Gold price is trading at its highest levels since December 2012 as the oil price war fueled the market’s already-risk averse sentiment. XAUUSD opened today’s trading higher at 1,692.91, up from where it closed on Friday at 1,673.63. The precious metal even went as high up as 1.703.06, its 7-year highs, before settling at 1,663.50.
Last week, OPEC talks broke down. This followed after Russia rejected calls for additional production cuts of 1.5 million barrels per day in an effort to support crude oil price. Since the beginning of this year, the commodity has lost over 20% of its value because of the coronavirus outbreak.
In response to this, Saudi Arabia announced that it would instead raise its production to above 10 million barrels next month. The country has also began offering discounted prices to Saudi crude oil. These actions are widely interpreted as the start of an oil price war with Saudi Arabia making moves to increase its market share.
Consequently, this development benefited gold price because of the precious metal’s safe haven status. The continuous rise in coronavirus also helped XAUUSD trade to new highs. As of this writing, there are over 110,000 confirmed cases all over the world and the death toll has risen to 3,825.
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Gold Price Outlook
On the 4-hour time frame, it can be seen that gold price got rejected around 1,690.00. This area also served as resistance for XAUUSD on February 24. Sellers have pushed price lower by over $4 from today’s Asian session highs. If they can maintain the bearish momentum, we could soon see XAUUSD fall to near-term support at $1,633.66 where it bottomed on March 4.
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Conversely, the hourly chart suggests a more bullish bias. By connecting the lows of February 28, March 3, and March 6, it can be sees that gold price is testing trend line support. Reversal candlesticks around its current price, 1,664.50, could mean that XAUUSD will soon rally to 1,702.50.More content
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