Gold bulls have lots of reasons to cheer in the near term. Out of which, the primary fundamental key drivers would be the chaos around – Coronavirus outbreak and Brexit.
Meantime, even the technicals were displaying a positive outlook for the yellow metal prices in the upcoming trading sessions.
Gold prices attempted to rise higher following WHO’s announcement on coronavirus. The World Health Organization (WHO) declared coronavirus as an International Public Health Emergency. WHO took this call, fearing the outbreak could spread beyond China. The current coronavirus death toll has already crossed above 170.
However, if the situation sustains for more days, then gold prices could benefit from it and take further upside rides.
After ending the 47 years of membership, the UK will leave the EU today at 23:00 GMT. Post-Brexit, there could be a series of reactions by both Brexiteers and pro-EU demonstrators. However, hardly any change would be reflected immediately after the Brexit as the UK begins a “transition period”.
In a nutshell, the fundamentals seem appealing to the gold bulls in the upcoming sessions.
The primary trend appears positive. The bulls continue to stay intact inside the upper region of the Bollinger Bands. Also, the Parabolic SAR was hovering below the XAU/USD pair, providing additional power to the gold bulls. At present, the gold prices have a single immediate target on the upper side – $1583.76 level. If the gold bulls are able to surmount above this resistance, then a strong bull rally could get triggered.
On the lower side, a one-month-old, as well as an eight-month-old slanting support level, remain instilled. Therefore, things appear well secured on the bottom side. Hence, I see an evident move to the upside if the aforementioned resistance level gets broken.
Meanwhile, the momentum in the Stochastic Oscillator continued to remain choppy, trading near ~54 levels.
On the lower timeframe, the XAU/USD pair appeared to trade upwards, keeping the short term uptrend intact. The XAU/USD pair was trading in the region formed by 1:1 and 2:1 Gann lines. Also, the 2:1 Gann line was tested many times in the last two weeks. However, the bears still couldn’t break below the 2:1 Gann line. Such a stubborn nature to withhold support levels are clear indications of bull run sustainability.
Needless to say, the MACD line and the signal line continued to trade well above the zero line. Also, on the immediate south side, I can see few significant SMAs, acting as a concrete cushion. Hence, I could hardly see any serious weakness in the upcoming gold price actions.