Gold Price is Rising

Gold was able to rise a little bit after bulls managed to prevent bears from breaking 1790.00. At the moment, it’s too early to say that the decline is over and the asset is expecting nothing but growth ahead because bulls haven't broken 1825.00 yet. Negative market sentiment forces investors to escape risks related to the stock market slump and the increasing number of new coronavirus cases, which may slow down the current economic recovery all over the world.
 
The number of investors, who are buying Gold, is reported to be increasing rapidly. However, it’s understandable since precious metal has always been considered a “safe haven” asset and tends to be extremely popular when financial markets and the global economy experience uncertainty. Given the current situation, which is the ongoing coronavirus pandemic and low rates, it’s not surprising that investors are getting more and more interested in Gold.
 
Another signal in favour of a further uptrend in Gold is the data on the open interest on Gold futures, which has been growing for several consecutive trading sessions. In this case, one shouldn’t exclude a further bullish trend after a long correction that we had been witnessing since the end of 2020.
 
As we can see in the H4 chart, after completing the descending wave at 1790.60, XAU/USD is correcting towards 1813.55. Possibly, the metal may continue the correction up to 1835.55, After that, the instrument may start a new decline to break 1785.00 and then continue falling with the target at 1751.51. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving below 0, thus confirming a further downtrend on the price chart.
 

 
In the H1 chart, Gold is correcting towards 1813.60 and may later fall to break 1790.00. Later, the metal may continue falling within the downtrend with the target at 1785.00. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: after rebounding from 80, its signal is expected to fall to break 50 and then continue moving downwards to reach 20.
 


By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
 
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.