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Unexpected FRS Decision Supports Gold

Gold prices remain in the green zone in response to the FRS unexpected decision to reduce interest rates by 1% and increase asset buyback programs by $700 billion.

 

FOMC held a special meeting on Sunday evening, before the official opening of the markets. The decision was made to support the economy in the context of the spread of the coronavirus pandemic. The FOMC decision weakened the market position of USD, and contributed to the growth of gold, which is denominated in USD.

 

Another support factor for gold is the situation on stock exchanges. Major indices are still constrained in the red zone, contributing to an increase in demand for defensive assets.

 

According to the Japanese television channel NHK, today the leaders of G7 countries will hold a teleconference at which they will try to work out coordinated actions to combat the virus and the consequences of its impact on the global economy.

 

There are no clear signals on the chart now. The situation is very uncertain. At lower time intervals, bearish signals prevail, so in the first half of the day we should expect a decline in quotations towards the area of ​​1528.50. From this level, the price can resume upward movement. With the breakdown of the level of 1528.50, the scenario with a decrease in quotations to 1510.00 will be the main one.

 

Resistance Levels: 1563.00, 1595.00, 1635.00;

 

Support Levels: 1528.50, 1510.00, 1475.00.

 

The main scenario - a decline towards 1528.50 and an increase towards 1563.00.

 

An alternative scenario - a breakdown of support at the level of 1528.50 and a decline towards 1510.00.

 

The fundamental outlook is moderately positive. We consider longs from the level of 1528.50.

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