Gold Price Forecast – Nearing $1700 Target as Pandemic Fears Grow
Buyers continue to push the gold prices higher. Last week, the yellow metal prices had crossed above the pivotal $1600 level. And, now $1700 level remains as the next aim under the radar for the cheerful bulls.
Coronavirus Updates
Currently, the primary catalyst behind the gold price rally remains the mounting tensions over the Coronavirus outbreak. As per the latest reports, a higher number of new cases were reported in Iran, Italy, and South Korea. Notably, Italy was struggling to contain the contagion as the third patient died off illness.
Meantime, responding to these growing tensions worldwide, the World Health Organization (WHO) said it no longer had a process for declaring a pandemic but the coronavirus outbreak remained an international emergency.
Interim, the US Dollar Index was underway recovery, struggling to regain losses suffered during the weekend. At around 10:41 GMT, the Greenback was trading near 99.62 level and have almost crossed 50% above the previous day bear candle. Such a combination of candlesticks represents a bullish piercing trading pattern. Hence, in the coming days, there could be a slight upliftment in the US Dollar as the uptrend has not yet been disrupted.
Technical Analysis
1-Week Chart
With the formation of new higher highs and higher lows, the gold prices continue to keep the uptrend intact. By the weekend, the XAU/USD pair is likely to enter the upper region of influence after crossing the critical $1700 mark. The Parabolic SAR remains well below the trading pair, signaling trend continuation in the upcoming sessions.
Meanwhile, although the Relative Strength Index appeared to clinch near overbought conditions, it lacked reversal hints.
1-Day Chart
On the daily chart, the bulls appeared to carry on the lead after showcasing a consolidation breakout on Feb. 17. Here, the XAU/USD pair has touched the upper boundary of the Bollinger Bands, demonstrating the rising strength of the gold bulls.
Nonetheless, as I look into the MACD technical indicator, I see a widening gap between the MACD line and the signal line after a MACD breakout last week. This rising gap between the aforementioned moving averages suggests a rising momentum in the upcoming price actions.
4-Hour Chart
The SMA conflux made up of 50-day, 100-day, and 200-day SMAs remain below the pair, cheering the bulls. Along the uptrend path, the XAU/USD pair has formed multiple intermediate Doji candlesticks that signifies strong positive trend continuation.
Nevertheless, the Stochastic Oscillator might show some diverging pattern that would further elevate the gold prices higher.