Bottom line: Gold is holding well below the $1747 resistance and is expected to accelerate lower towards $1450 as initial medium term target. Bears remain poised to push below $1640 levels, in the short term.
Fundamental Outlook:
WTI Crude drops historically, printing below the $1 per barrel mark yesterday. The year 2020 has seen 65.62 being print in early January and now 0.01 lows in April. OPEC members had agreed to cut production by around 10 million per day, along with Russia and Saudi Arabia agreeing to end price war. Nothing could stop a 99.95% drop in WTI Crude prices yesterday.
Events to watch today:
05:00 AM EST Euro Zone ZEW Survey
05:00 AM EST German ZEW Survey Expectations
Technical Analysis:
Gold continues to print lower lows and lower highs since $1747 levels on April 14, 2020. In the short term, bears might be looking to push towards $1640 levels before producing any meaningful pullback.
Looking at the lower time frames, immediate resistance is at $1738, followed by $1747 while support is seen towards $1640 levels respectively. If a meaningful top is in place at $1747, high probability for the next move is to break below $1640 levels.
A break below $1640 would not only boost further weakness, but also confirm an impulse drop from $1747 levels. It would imply that Gold is preparing for a much deeper correction and the next potential target remains $1450.
Now looking at the bigger picture, Gold might have terminated a multi-year counter trend rally that had begun from $1046.00 lows in December 2018. If the above holds well, $1747 should remain intact and the yellow metal to resume lower. The larger degree drop is expected to complete below $1046.00 going forward.
Most traders might be willing to remain short with protective stop above $1747 and projected targets below $1046 in the long run.
Prepared by
Harsh Japee, Technical Analyst.
Gold Chart
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