- Summary:
- Gold price trying to stabilize today after the worst week in over a month for the precious metal. Gold has lost almost 5% this week moving
Gold price trying to stabilize today after the worst week in over a month for the precious metal. Gold has lost almost 5% this week moving in the same direction as global equities. The main reason for the correction is the rising USD which managed to rebound from two-year lows. I have discussed the drop in the gold price as the USD rebounds in my previous article: Bearish Picture for Gold Price As USD Rebounds.
Despite the low-interest rates environment across the globe, gold failed to keep its safe-haven status. Investors are booking some profits off the table from stocks and commodities after the recent rally to all-time highs. Traders fear that the economic recovery has stalled after the recent resurgence in new coronavirus cases, especially in Europe.
Stocks in Wall Street managed to end in positive territory yesterday on reports that Democrats are preparing a 2.2 trillion new relief package. Economic data in the U.S. shows that the recovery has slowed down. Yesterday, the initial jobless claims increased, unexpectedly raising the fears that the recovery has stalled the last two months. Jerome Powell and other Fed members warned that the economy needs more fiscal stimulus to avoid a deeper recession.
Gold Price Daily Technical Analysis
The gold price tested yesterday the 100-day moving average, S&P 500 and Dow Jones also tested yesterday the 100-day moving average. Gold price is 0.29% higher at 1,872 as traders bet on a sharp rebound from the 100-day MA.
Gold intraday resistance stands at 1,874 the daily high. The next hurdle for gold would be met at 1,913 the high from September 23. Recent bearish action might be cancelled if the price breaks above the 50-day moving average at 1,942.
On the downside, if the gold price breaks below the 100-day moving average at 1,844. Bears would be in control below that level and might test 1,802 the low from July 20.
Gold Price Daily Chart
