Gold bulls are facing resistance at the $1650 area and the bullish trend may continue after a certain retracement. XAU broke above the $1585 support level and moved higher quite impulsively. Let’s check the following technical analysis for more levels and insights.
March 4, 2020 | AtoZ Markets – The price of Gold was successfully able to close above $1600 area after Gold rejected $1585 support levels. The Gold is currently trading at $1640 area and may continue upward, but a certain retracement may take place. If the buyers can maintain the Bullish momentum, the Gold may continue higher in the coming days.
Gold Price Fundamental Highlights
Gold price rose today in Asia after the United States Federal Reserve’s rates cut. The U.S. Central Bank cut the interest rates by 50 basis points, which is outside the routine cycle meetings for the first time. On the other hand, Gold traded higher after the news released of rates cut, but FED rates cut, making the Gold cheaper for those who are buying in different currencies. Gold now jumped more than 8% so far this year as it became a safe-haven market.
Moreover, Head of Commodity at Geojit Financial Service, Hareesh V said, “Gold may edge higher further as investors seek safety in gold amid concerns over the global economic slowdown. As Coronavirus is now spreading faster outside China and the U.S. Fed’s emergency rate cut roiled financial markets, the demand for safe assets like Gold will increase.”
Gold Faces Resistance at $1650, May Continue Uptrend After Retracement
The price of Gold is dropping after facing resistance at the $1650 area. After Gold rejected $1585 area, Bulls pushed the price higher quite impulsively. However, the Bullish run may continue after a certain retracement.
Image: Gold 4 Hour Chart
According to the 4-hour chart, Gold is now residing near $1635 and continuously declining. After an impulsive and non-volatile move, Gold faces resistance at the $1650 area. If Bears can push the price down towards $1610 area, the Bullish pressure may sustain further with the target of $1688 again.
Moreover, the dynamic level of 20 EMA is now residing below the current price, along with the Kijun line and the Tenkan line. It may pull the price down towards $1610 area for a retracement as Mean reversion and may become support for the upcoming Bullish move.
Buyers May Push Price Higher Towards $1700
According to the Daily chart, Gold is currently trading at $1635 area after a strong daily close. After finding support at the $1585 level, the gold price moved higher towards the $1650 area. Gold daily bar engulfed the Monday’s indecision bar quite strongly. The price may now retrace 50% of the engulfing bar before it pushes higher toward $1700 area, 2013 high.
Image: Gold Daily Chart
Moreover, the dynamic level of 20 EMA is residing below the current price, along with the Kijun line and the Tenkan line. It may hold the price as support and may push the price higher towards $1700 area in the coming days. On the other hand, the MACD lines are moving higher gradually as the Bullish pressure continues. Currently, the MACD lines are residing above 0.00 level and may maintain there.
To conclude, Gold price may retrace down towards $1610 before it continues the Bullish pressure. If the price is able to have a daily close above $1650, it may push higher towards our expected area $1700 soon.