Bottom line: Gold remains vulnerable to drop further until prices stay below $1747 resistance, going forward. A potential lower high could be in place at $1738 and a break below $1661 would encourage further slide.
Fundamental Outlook:
Gold prices have been trading back and forth the recent highs at $1747, since the last two weeks. The yellow metal has slipped below the $1700 mark today after having tested recent highs last week around $1738. With Fed Interest Rate Decision tomorrow around 02:00 PM EST, we can expect some volatile price action in the yellow metal.
Crude Oil prices continue to slide having opened weak yesterday. WTI Crude closed nearly 25% lower around $13.00/barrel, while Brent Crude closed just below the $20.00/barrel, down 10% yesterday. The continued slide has been mainly attributed to the sluggish global demand due to COVID-19 pandemic, despite the production cut (10 million barrels per day) by OPEC.
DAX alongside Global Indices outlook remains gloomy, as it trades just below the previous high at 10600 levels. The US and Euro zone GBP figures are expected later this week (US, April 29 and Euro, April 30). The Q1 expectations remain gloomy amidst COVID-19 pandemic and lock down effects. An even worst print would trigger another round of selloff.
Technical Analysis:
Gold might have carved a meaningful top at $1747 levels on April 14, 2020. Furthermore, a lower high is also in place at $1738 last week and prices should stay lower going forward. The yellow metal is trading around $1694/95 levels while we write this article, and a push through $1661 would trigger further sell off.
Immediate resistance is seen at $1747, while support is seen at $1572, followed by $1450 respectively. Bears would remain inclined to drop towards $1450 levels and that would confirm a trend reversal. If prices break above $1738 and $1747, it could print yet another high but could be shallow.
Most traders might be holding short positions taken earlier, with stop above $1747 levels and projected targets around $1572 and $1450 levels respectively.
Prepared by
Harsh Japee, Technical Analyst.
Gold Chart
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