Gold is in the green zone today, despite the growth of the stock market. Investors reacted to Donald Trump's criticism of China which supported gold prices. In an interview with Reuters, the US president noted that the COVID-19 pandemic would have negative consequences for a trade deal with China. Now the White House administration is considering various options for responding to the ineffective struggle of the PRC with coronavirus and its spread around the world. Trump stated that China will make every effort so that he does not win the next presidential election.
Perhaps today the topic of aggravation of relations between the US and China will become a key one. After local growth, stock indices may turn down, providing additional support for gold.
Gold price was also positively affected by the outcome of the FOMC meeting that ended on Wednesday. The regulator expectedly kept the main parameters of monetary policy unchanged, but announced the use of the full range of tools to support the economy. Powell predicted further economic deterioration and called on Congress and the White House to build stimulus measures.
The deteriorating state of the US and world economies, as well as the further buildup of incentive measures and liquidity in the long run create a favorable situation for the further growth of the value of gold and other protective assets.
Today in the economic calendar it is worth paying attention to the results of the ECB meeting and the publication of weekly data on applications for unemployment benefits in the United States. In his speech, Jerome Powell noted that the unemployment data published on Friday will be presented in double digits.
A rising wave is developing on the chart. The bulls are preparing for a resistance retest at 1722.00. In case of a breakdown of this level, the next target for price movement will be the level of 1740.00.
Resistance Levels: 1722.00, 1740.00, 1755.00;
Support Levels: 1695.00, 1675.00, 1645.00.
The main scenario - a breakdown of resistance at 1722.00 and an increase towards 1740.00.
An alternative scenario - a consolidation in the range of 1695.00-1722.00.
The current fundamental outlook is moderately positive. Today, bullish signals prevail on the chart. Within the daily framework, we prioritize longs. Entry points should be localized near the mark of 1700.00.
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