Gold completed trading on Monday at maximum levels since the end of 2012 amid a sharp decline in the US stock market and growing expectations regarding further actions of world central banks to stimulate the global economy. Many investors began to show nervousness before the start of the corporate reporting season, as economic data and quarterly earnings reports of companies may be significantly lower than expected. Later this week, corporate reports from US financial sector giants will be published, led by JPMorgan Chase, Bank of America and the Goldman Sachs Group.
Today, at the beginning of the European trading session, gold is at a moderate decline. The price is pressured by a number of factors. First, Asian and European indices are trading in the green zone today, which reduces investor interest in defensive assets. Secondly, investors are responding positively to news of a decrease in the number of new cases of coronavirus disease worldwide. The leaders of many countries expressed cautious optimism regarding the improvement of the epidemiological situation. Thirdly, pressure on gold is exerted by technical factors. Considering the multi-year trading maximums, many speculative investors fix long positions with gold.
Today there is no important news in the economic calendar, therefore the situation on the stock exchanges and the news of geopolitics will have the main impact on trading.
A breakdown of the psychologically important resistance level of 1700.00 took place on the chart. This is a serious bid by the bulls to continue the long-term trend in the direction of the level of 1800.00. Locally, we can expect the formation of a retreat in the direction of the level of 1688.00.
Resistance Levels: 1725.00, 1740.00, 1750.00;
Support Levels: 17105.00, 1700.00, 1688.00.
The main scenario - a decline towards the level of 1688.00 and further upward movement.
An alternative scenario - further growth from current levels.
The fundamental outlook is neutral. We would prioritize longs when the price rolls back to the area of 1688.00.
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