XAUUSD, H4 – Finally, gold prices were able to rise to a new all-time high above 2000 at 2030 after yesterday’s gold price closed by more than 42 US Dollars. This morning it moved up, retraced and has progressed to R1 at 2035 currently.
As a safe haven, gold appears to have acted as a hedge against inflation, because the impact of the Covid-19 outbreak has caused central banks around the world to stimulate the economy through the use of quantitative easing (QE) as well as pressing interest rates to long-term lows. This could be worrying, as once the epidemic has passed and the economy recovered to normal the world economy may face severe inflation.
While the US stock market closed up last night, the result of Wall Street’s second-quarter earnings report had the Nasdaq re-entering a new all-time high. The US Dollar is currently in a downtrend. It closed yesterday at 93.20 while yields fell at historic lows, with the 10-year US bond fell to 0.52%. Meanwhile, the number of people infected with Covid-19 worldwide continues to increase, this week over 18 million.
Aside from the fundamental factors, technical factors continue to support gold prices to make a new all-time high. Gold prices have recently risen due to breaking the bullish ascending triangle that has been forming since last week. After reaching the 9-year high of 1920 and making a new all-time high, it is even more difficult to find technical goals in the upside if using Fibo to draw from the March 9 high to find a low. March 16 is the next significant level at 261.8 at the price zone 2100.
While looking for the signal of a price reversal we may have to look in parallel with the USD (USDIndex) and the development of the Covid-19 vaccine, while the price of 2000 may become a major support zone after this.
This week, there are still important events from the US side that will affect gold prices. Today, the numbers of ADP Non-Farm and ISM PMI employment are announced. Tomorrow weekly unemployment claims will be released. And on Friday there is the monthly Non-Farm Payrolls event.
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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
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