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Gold renews 8-week maximum

Gold kicks off its first trading day in 2021 with a steady rise of more than 1.5% amid a sharp rise in the number of COVID-19 cases worldwide and the prospect of stricter containment measures in many countries.

 

Trading opened above $ 1900, after which the price continued to rise, renewing highs in more than 8 weeks of trading.

 

According to Johns Hopkins University, the COVID-19 pandemic continues to spread rapidly. As of January 4, there have been over 85 million cases of COVID-19, of which more than 20.6 million are in the United States.

 

A record number of COVID-19 cases have been reported in Japan. Prime Minister Yoshihide Suga said he would consider introducing a new state of emergency for Tokyo and surrounding prefectures.

 

British Prime Minister Boris Johnson also announced a possible tightening of quarantine in the country.

 

Against the background of deteriorating prospects for the development of the world economy in connection with the worsening epidemiological situation in the world, investors are again actively buying traditional defensive assets. Additional support for gold is provided by the dynamics of the dollar index. Since the beginning of the day, the instrument has dropped by 0.25%.

 

In the coming days, investors will pay great attention to news from the state of Georgia, where the second round of the Senate elections will take place on January 5. According to the results of the vote, it will be known who will get the majority of seats in the Senate, Republicans or Democrats.

 

A breakout of resistance at 1915.00 took place on the chart. Gold opens up good prospects for further growth towards the levels of 1935.00 and 1967.00.

 

  • Resistance levels: 1935.00, 1967.00, 1993.00.

 

  • Support levels: 1900.00, 1867.00, 1850.00.

 

The main scenario is a pullback to 1900.00 and an increase to 1935.00.

 

Alternative scenario is growth of quotes from the current levels.

 

The current fundamental outlook is moderately positive. We consider longs after the price rolls back to the 1900.00 area.

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