Gold price was hit by a relentless selloff in the New York session, allowing the pair to touch off price levels close to yesterday’s lows as markets react in a knee-jerk manner to the UK’s announcement of the resumption of musical concerts and reopening of pubs and gyms. This announcement follows similar ones made by several European countries in the past week.
The picture in the markets today has been that of a mixture of risk-on and risk-off sentiment. Supporting risk-off opinion and a selloff on the US markets is the Supreme Court decision to turn over President Trump’s tax records to a New York prosecutor. Furthermore, record increases of coronavirus cases in Arizona, Alabama, Florida, California and Texas are other factors which should naturally force a flight to safe-haven assets.
Another factor adding to the risky sentiment is the commentary by the top public health official in the US, Dr Anthony Fauci. Fauci says he is hopeful that a coronavirus vaccine would be available by the end of 2020/beginning of 2021.
Gold price is now trading at 1800.45, or 0.46% lower on the day.
Technical Outlook for Gold Price
In a gold price analysis of yesterday, I identified the 50% Fibonacci retracement from yesterday’s highs as a possible dip area. This scenario played out today and price has bounced a few pips from this area.
On the daily chart, this price move shows up as a brief dip below the 1802.45 support line – the support line’s integrity remains. Price would need a bearish candle to the existing bearish harami setup to set off a retracement below 1788.90, which would open the door for a further dip towards 1762.51. Below this area, 1748.40 remains relevant support.
Conversely, the scale of sentiment may sway in the direction of safety, which could allow any of the support areas above to become dip-buying points. 1820.56 and 1832.51 (R1 and R2 pivots) remain possible price targets in the near-term for traders bullish on gold price movements.