- Summary:
- Gold price has been trading within a range since last week on news of improvements on the coronavirus pandemic. Will resistance at $1,620.00 hold?
Gold price has been trading within a $49 range since last week on news of improvements on the coronavirus pandemic. As of this writing, XAUUSD is slightly below its opening price at $1,627.26, down at $1,614.00.
Early last week, gold price rallied on risk aversion sparked by the coronavirus which has crippled the global economy. The US has officially outranked China with the most number of confirmed cases at 164,603 as of March 31. Additionally, the global death toll has gone over 37,800.
However, there were some rays of optimism towards the latter part of the week. For one, Italy’s death toll dopped for two consecutive days on Friday. There was also news that Johnson & Johnson may roll out a vaccine by early 2021. Consequently, these reports has put a cap on the rally of gold price. But will it last?
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Gold Price Outlook
On the daily time frame, it can be seen that gold price has recouped most of its losses. It is currently trading around $1,620.00 where it is testing resistance at a broken trend line (from connecting the lows of December 13, February 5, and March 2). There are already reversal candlesticks which materialized just below the trend line. This may indicate that gold price could soon resume its drop and retest its March lows at $1,460.28.
On the other hand, the 4-hour time frame presents a more bullish setup for XAUUSD. By connecting the precious metal’s recent highs and lows, it can be seen that a bullish pennant chart pattern has formed. This chart pattern is characterized by lower highs and higher lows following a drastic rally from the market. A close above the high of March 26 at $1,644.41 could suggest a bullish run to the highs of March 9 above the $1,700.00 handle.