XAU/USD Outlook: Gold hits seven-year high on safe-haven buying despite optimistic signals over coronavirus case

Slobodan Drvenica Windsor Brokers

GOLD

Spot gold extends steep ascend on Thursday, inflated by strong safe-haven demand on fears of coronavirus spread outside China, despite signs of strong drop in the number of new cases and PBOC's cut of benchmark lending rate, in attempts to support the economy and reduce negative impact from virus outbreak. The yellow metal rose to new seven-year high ($1619) after breaking previous top at $1611 (posted on 8 Jan). Gold price is currently riding on extended wave C of five-wave sequence from $1547 and pressures its FE200% at $1621, violation of which would expose Fibonacci expansion level at $1632 (238.2%). Caution of bulls losing traction on fresh dollar's advance, overbought daily stochastic / RSI, while bullish momentum is fading. Corrective dips below $1600 handle are expected to offer better buying opportunities while contained above $1590 zone (near Fibo 38.2% of $1547/$1619 upleg). Rising 10DMA ($1584, also near 50% retracement) marks pivotal support, break of which would put bulls on hold.

Res: 1619; 1621; 1632; 1639
Sup: 1603; 1600; 1591; 1584

Interested in XAU/USD technicals? Check out the key levels

1. R3 1630.9
2. R2 1621.95
3. R1 1617.46
PP 1608.51
1. S1 1604.02
2. S2 1595.07
3. S3 1590.58

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.