Gold prices continued to stay positive for the fourth day in a row. This optimism in the yellow metal might act as a prelude for a robust upward rally.
Perhaps, gold prices might grow further as equities and oil continue to drop. Investors appear to shift towards the anti-fiat gold over fears of deadly coronavirus.
This new virus has emerged from Central China, where it killed almost 81 people even before the symptoms show up. However, as per the authorities, the incubation period of the virus ranges from one to 14 days.
Now, officials have confirmed five US cases of coronavirus after their China travel.
Amid this alarming situation, investors have gone unnerved and have started to move towards the yellow metal. In the coming days, depending upon the incoming data, the gold bulls might take charge.
Needless to say, the resilient growth in the US Dollar Index might hinder the gold price upliftment. The Greenback has triumphantly broken out from an overhead Kumo Cloud, giving hopes for more upside.
The week begins on a positive note like last week. I hardly notice any weakness in the price actions. The overall momentum remains in the overbought territory. Therefore, the bulls have enough ammunition for their next moves.
Quite noticeably, the robust $1554.33 resistance was broken the week before last. And, any immediate downside would get caught in the hands of a multi-month old slanting support line.
Here, on the daily chart, I can see the formation of a month old cup and handle trading pattern. In that case, the first section (cup portion) is already ready. Now, the next move should most probably be a slight correction followed by a powerful bull run.
Even here, the Stochastic Oscillator was indicating the continuous build-up in the momentum for future price actions.
Meanwhile, the XAU/USD pair continues to trade inside the upper region of the Bollinger Bands, keeping the uptrend intact.
Two days back, the pair had crossed above a sound resistance stemmed near $1577.51. Now, with the MACD line and the signal line above the zero line, the bulls might continue to take control of the pair. On the upper side, strong resistance levels remain stalled near –
Nevertheless, in case of any immediate downside/ slight correction, then focus on the following supports –
Further on the downside, SMA conflux made up of the significant SMAs continues to provide act as a cushion for potential downfalls.