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Gold is trading above $ 1900

Gold and other defensive assets on Monday are showing strong growth amid reports of the discovery of a new strain of coronavirus in the UK and some other EU countries. Gold was further supported by news that congressmen in the United States had agreed on a new $ 900 billion economic aid package.

 

On Sunday, Republicans and Democrats announced they had agreed on a new $ 900 billion stimulus package. The vote on the new bill is due tonight. It will be the second largest stimulus program in US history after the $ 2.3 trillion program adopted this spring. dollars. A White House spokesman has already announced that Donald Trump will sign the bill as soon as the House and Senate approves it.

 

Over the weekend, UK Health Minister Matt Hancock announced the identification of a new strain of coronavirus, which, in his words, "got out of control." To contain the spread of a new strain of the virus, which scientists initially estimate is 70% easier to spread from person to person, the UK has tightened quarantine measures. Several EU countries have also reported bans on entry for UK citizens.

 

Over the weekend, representatives of the UK and EU were unable to converge their positions on a trade agreement. There is less and less time for negotiations. The parties are unwilling to make concessions, which increases the likelihood of Brexit without an agreement.

 

All of the events noted above had a strong negative impact on the risk appetite of investors. World stocks are actively declining. The demand for gold and other defensive assets is growing.

 

On the chart, the price broke through the local resistance at the level of 1895.00 on the second attempt. The next target for growth is the level of 1915.00. If sellers fail to demonstrate their strength at this level, the next target for growth will be 1967.00.

 

  • Resistance levels: 1915.00, 1967.00, 1993.00.

 

  • Support levels: 1895.00, 1870.00, 1861.00.

 

The main scenario is growth towards 1967.00.

 

An alternative scenario is growth to 1915.00 and a downward reversal.

 

The current fundamental outlook is positive. We consider longs from the level of 1895.00.

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