Gold prices just reached a new February high, and that might be the start of further gains in the days ahead.
Gold prices, XAUUSD, have been inching higher over the last few weeks on the coronavirus fears, and yesterday, Apple (AAPL) issues a profit warning, as they think they will struggle to reach their targets with China being shut because of the virus.
However, it appears that the move that sent gold prices higher today is the move of the US to sanction the Russian oil company Rosneft, as they allegedly helped Venezuela to export oil. Senior US officials are giving companies involved with Rosneft 90 days to cease engagement with the company. If anyone persists in dealing with Rosneft, they could themselves be sanctioned.
Read our Best Trading Ideas for 2020.
XAUUSD Technical Analysis
As I have been reporting over the last few days, the prior February high of $1593.72 was an important level, as it aligned itself with one of the intraday highs of January 8, creating a near double top.
On January 8, the XAUUSD also reached a high of $1611, however, it was more of a spike during quiet hours and the price did not spend more than two hours around the $1611 level before trading lower, I am therefore ignoring the spike to $1611.
By ignoring the spike to $1611, we can interpret the break to the February 2 high as the completion of an ascending triangle pattern with a target of $1645. The pattern will remain in play as long as the price trades above the February 17 low of $1577.83, while investors that do not want to be too close to price action will probably focus on the February 12 low of $1561.
Don’t miss a beat! Follow us on Telegram and Twitter.
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Alejandro on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.