Gold price continues its parabolic move making higher highs for the fifth straight session having reached the highest level since September 2011. The move today is attributed to the rising tensions between China and the USA after the US administration ordered the closure of the Chinese consulate in Houston, Texas, over spying allegations. China immediately warned that it would retaliate and now some reports said that China would be closing the US consulate in Chengdu. A fresh round of confrontations between the two superpowers sends investors to safe-haven assets such as gold.
Meanwhile, the rising number of coronavirus cases also weighs on investors sentiment as the fear of a second coronavirus wave might cancel the reopening process and would halt the global economic recovery.
The better than expected economic news from USA and Europe supports the equities around the globe while Nasdaq makes fresh historic highs as investors dump the US dollar. That is another factor that boosts the gold price, which denominated in USD.
Today’s strong move in the gold price and pressure in the silver price drives the rebound in gold to silver ratio. Yesterday the gold to silver ratio hit the lowest level since September 2019, at 80.81.
Gold Daily Technical Analysis
Gold price is 0.59% higher at 1,883, as the precious metal makes consecutive higher highs and now challenge the 2011 highs at 1920. The technical picture is clearly bullish, and higher levels are on the cards, as the pullbacks should be considered as a buying opportunity. A warning signal for the bulls is that the RSI 14 index is trading at extreme overbought levels for the fourth consecutive trading session.
On the upside, the main resistance for gold price is at 1,888 the daily high. If the gold breaks higher, then the next hurdle would be met at 1,920 the September 2011 highs. Above that, the only resistance would be 2,000 psychological mark.
On the other hand, immediate support for gold stands at 1,863 the daily low. A move below might challenge 1,835 the low from yesterday’s trading session. If the sellers continue the pressure, then the next support area stands at 1,800 where the rising trend line from March 20 lows crosses.