Gold corrects lower, but it may continue the bullish run towards the $1700 area. The price may find support at $1600 to push the price higher. Let’s check Gold Technical Analysis for more levels and insights.
February 25, 2020, | AtoZMarkets – Gold is consistently pushing lower after markets open this week. The Bearish pressure is currently quite impulsive may take the price down towards $1600. Price is currently residing near $1630 area, which may continue to push the price down. After retracing towards $1600 support area, Bullish pressure may continue further.
Gold reached a high of 2013 on Monday this week. Rising fears of the Coronavirus outside China led to surging demand for the Gold due to its safe-haven appeal. As infections spread overseas countries like Italy, Iran and South Korea, fear is increasing rapidly around the Globe. On the other hand, South Korea reported 231 new cases, raising the country’s total to 833 cases. The death toll in Iran reportedly rose to at least 12 this Sunday.
The Coronavirus is going to increase the systemic problems engulfing the world. But Cornavirus has nothing to do with the fact that the United States is overleveraged at every level of the economic system. And also China, Japan, and the EU are overleveraged at the Government and corporate level. The Global economy is sliding into indecent recession well before Coronavirus hits the scene. As a result, Gold gained attraction from global investors and gained more in value.
Gold may Correct Lower Towards $1600 Area
As per current price action, Gold may push lower towards $1600 area. After reaching the high of the last seven years, Gold failed to sustain its momentum. If Gold continues to push lower, it may retest support toward $1600 soon before any Bullish intervention is seen.
image: Gold 4 Hour Chart
According to the 4-hour chart, the Gold may correct lower towards $1600 support area. If Bears can push the price lower to the support zone and Bulls to intervene, Bullish momentum may continue towards $1700 area. The Gold broke down the dynamic level of 20 EMA, along with the Kijun line and the Tenkan line. It’s a good indication that Gold may push more downwards.
Moreover, the MACD indicator showing Bearish crossover after an extended period of Bullish movement, and the MACD histogram volumes are also sloping down. Both indicate that Gold may correct lower towards $1600 area before Gold Bullish momentum continues.
Gold Bullish Momentum may Continue Further
According to the daily chart, Gold is currently residing near $1630 area may retrace down. After today’s market open, Bears push the price down very impulsively. If Bearish bias continues, Gold may retrace lower towards $1600 area.
image: Gold Daily Chart
Moreover, The dynamic level of 20 EMA is currently residing below $1600 area. As a result, it may pull the price down as a Mean Reversion. Moreover, the Kijun line and the Tenkan line is also far below from the current price and may act as a confluence along with the other supportive elements.
To conclude, Gold Bearish momentum may push the price toward $1600 support area soon. After that, if the Bulls intervene, then certain upward pressure may occur in the coming days.