Despite slight corrections, the gold prices remain stabilized on Wednesday. And, the primary trend continued to stay positive.
Meantime, rising death tolls out of coronavirus outbreak remained the main theme for the slight drop in the gold value. Also, the investor shift towards Dollar and Equities favored the short term yellow metal bears.
US Economy is in a Good Place: Powell
The Greenback was found to rebound downwards after touching the 2020 highs. Quite notably, the Dollar Index nosedived slightly over the rising concerns on the coronavirus outbreak.
Federal Reserve Chair Jerome Powell mentioned in a recent press meet said that the US economy is in a good place. Powell also added that the Fed rates would remain within the current range, between 1.50% and 1.75%. However, Powell warned that the coronavirus could have severe impacts on China and its neighbors. And, it might also have some minor effects on the US in the long term.
On the technical side, though the USD Index showed some initial jitters, it continued to hold on its accumulated gains. The MACD line and the signal line remain well above the zero line of the indicator, providing ammunition to the Greenback bulls.
On the daily chart, the yellow metal prices appeared to slow down, breaking below the base line and conversion line of the Ichimoku Clouds. Anyhow, the XAU/USD pair continued to stay well above the green Kumo Cloud, keeping intact the bullish prospects.
Meantime, any downward price action would get immediately triggered if the pivotal $1546.42 support mark is broken. However, the bears had been trying to drop the prices below the aforementioned mark since Jan. 14. Hence, until date, the bears continue to rebound upwards after testing this robust support handle.
Also, on the lower side, there is a robust multi-month old slanting support line that remains instilled, preventing any potential substantial plunges.
Here, the XAU/USD pair appear to strengthen the bullish flag pattern, staying range-bound since Jan. 08. The significant SMA conflux made up of 50-day, and 100-day SMAs have pushed and moved above the pair, encouraging the near term bears. However, the most significant 200-day remain stemmed below the pair near $1557.16 level, pleasing the long term bulls.
Nonetheless, the Stochastic Oscillator was indicating 34.78 levels, revealing a lack of momentum in the pair. Therefore, I expect the gold prices to continue trading sideways, gathering power for the long term bull run.