Gold is traded at $1720 and it could jump way higher as the USD drops versus the major currencies. The yellow metal could take advantage of the dollar weakness and it could approach the $1800 psychological level in the upcoming days.
The global uncertainty and the potential recession caused by COVID-19 pandemic could push the gold price towards fresh new highs. The outlook is bullish as long as the price stays above the broken $1700 level.
Gold is trading in the red right now, but this could be only a temporary drop before it will resume the upside movement. I've said in my previous analysis that you should wait for a valid breakout before considering going long again on gold.
A consolidation above the $1700 level and above the weekly R1 ($1702) level will signal a further increase in the upcoming period. The first upside target remains at the upper median line (uml) of the ascending pitchfork, the second major target is seen at the $1800 level.
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We may have another buying opportunity if the price will test and retest the broken $1700 and R1 (1702) level. A false breakdown with a great separation below these levels will announce a strong bullish momentum. If the price will make another higher high, if it will jump and close above the $1747.64, most likely it will make a valid breakout above the upper median line (uml) and it will approach the $1800 target.
I believe that a further increase will be invalidated only if Gold will drop and stabilize below the median line (ml) and below the downside sliding line (sl1) of the minor ascending pitchfork. A USDX's further drop indicates the dollar's weakness and the gold price strength.
