Gold Price Analysis – XAU/USD Painting an Increasingly Positive Picture

Gold Price (XAU/USD), News and Chart

  • Last Friday’s blow-off candle being slowly retraced.
  • Lower interest rates will boost gold’s appeal.

Gold Recovering After Last Week’s Capitulation

Gold continues to claw back last Friday’s sharp sell-off with both the technical and fundamental background looking increasingly positive. Last week’s equity market meltdown will continue to dominate investors thinking and risk-averse assets will remain in demand in the short- to medium-term. The unchecked spread of coronavirus remains the financial market’s number one driver, while political unrest in the Middle East and Turkey/Greece adds to gold’s risk-off appeal. In addition, the G7 meet today – 12:00 GMT – and will announce their response to the ongoing coronavirus threat and its impact on global growth. Talk continues to swirl that there may be a coordinated rate cut to help boost global GDP, an action that would boost the value of gold even further. US interest rates and the price of gold have a negative correlation.

Gold Forecast

Recommended by Nick Cawley

Download our Brand New Q1 2020 Gold Forecast

The technical outlook for gold remains positive with the precious metal making another higher low on the daily chart. While Friday’s sell-off saw the gold price dip below the recent uptrend, it did not close below it. Price action since then has been to the upside, with the 50-dma adding support. A break above $1,608/oz. opens the way to $1,611.5/oz. before the $1,648/oz. – $1,650/oz. zone comes back into focus. The CCI indicator is relatively neutral, while the ATR indicator shows volatility at a multi-year high.

Gold Daily Price Chart (August 2019 – March 3, 2020)

the price of gold recovering after heavy sell-off.

How to Use IG Client Sentiment in Your Trading

How to Use IG Client Sentiment in Your Trading

Recommended by Nick Cawley

Improve your trading with IG Client Sentiment Data

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on Gold (XAU/USD) – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

Be the first to comment

Leave a Reply

Your email address will not be published.