Gold increased in price on Tuesday after reports of a possible easing of monetary policy by large central banks.
Central banks, including the US Federal Reserve, the ECB, the Bank of Japan and the Bank of England, have alluded in recent days to easing monetary policy in order to support economies in the face of the spread of the deadly coronavirus. Today, the Reserve Bank of Australia has already lowered its interest rate to a historic low of 0.5%, alluding to the possibility of further easing of monetary policy. Investors are almost 100% likely to expect the FRS to lower the rates. These actions will lead to a weakening dollar and lower profitability of the American treasuries, which, as a rule, is a driver for gold growth.
Today, the situation on the stock exchanges will have the main impact on the dynamics of gold prices.
A very mixed situation is being formed on the chart. Yesterday, bulls could not overcome the resistance at the level of 1605.00, therefore, the scenario with a further increase in quotes today can only be considered as an alternative. The priority is the development of a sidewall in the range of 1575.00-1605.00.
Resistance Levels: 1605.00, 1630.00, 1680.00;
Support Levels: 1575.00, 1563.00, 1550.00.
The main scenario - a consolidation in the range of 1575.00-1605.00.
An alternative scenario - a breakdown of resistance at the level of 1605.00 and an increase towards 1630.00.
The fundamental outlook is moderately positive. We consider both longs and shorts from the borders of the horizontal channel 1575.00-1605.00.
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