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Gold is prepared to renew multi-year highs

Gold continues its upward movement. Now it's set above $ 1,600 per ounce amid growing fears related to the spread of coronavirus and its impact on the global economy. According to Morgan Stanley analysts, due to the epidemic, global economic growth may slow down in the 1st quarter by 0.5%, and China's economic growth in particular may be slowed by 1.8%.

 

Apple's statement regarding revenue and sales in the 1st quarter of 2020 being lower than forecasted due to the coronavirus epidemic became the driver for the new bullish wave for gold. Many experts note that weaker statistics in the 1st quarter will be shown by other large companies, which are highly dependent on the situation in China.

 

In addition to geopolitical news, economic news will have an impact on trading today. Today the US is expected to publish data on the number of permits issued in January for the construction of new houses and data on the producer price index.

 

Regarding the chart, the bulls are fixed above the level of 1600.00, which is a good signal in favor of the further development of the upward movement. In the near future we can expect an update of the local maximum at 1611.00.

 

Resistance Levels: 1611.00, 1615.00, 1630.00;

 

Support Levels: 1600.00, 1585.00, 1563.00.

 

The main scenario - growth and breakdown at the level of 1611.00.

 

An alternative scenario - a consolidation at the level of 1600.00 and a decline towards 1585.00.

 

The fundamental outlook is moderately positive. Within the daily framework, we give preference to longs, which can be considered at the levels of 1600.00 and 1585.00.

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