The gold price after a weak start in the Asian trading session managed to return to positive territory today as the rally that started yesterday after the Fed cut the interest rates by 50 basis points to 1% – 1.25%. Fed proceeds with an emergeny interet rate cut amid the coronavirus outbreak and the severe impact on the U.S. and global economy. Gold tested the 50-day moving average and managed to rebound on Friday, while yesterday the gold price managed to return above above the ascending trendline that began on December 2019.
Traders expect and other central banks around the globe to proceed with interest rates cuts that will be gold positive, as the lower rates reduce the opportunity cost of holding non–yielding gold in a portfolio.
Gold price is 0.05% higher at $1640.90, as the bullish momentum is intact after the gold price returned above the upward trendline.
On the upside, first resistance for gold stands at $1652.81 the daily top. A move above might open the way for the next resistance at $1659 the high from February 27th trading session. In case of a step above the next obstacle stands at $1663 the high from February 25th.
On the other side, first support for gold price stands at $1585.30 the daily low. The next support for gold will be met at $1575 the low from March 2. If the price breaks below, sellers will target the 50-day moving average at $1569.