Gold is trading in the green again after a minor drop and after temporary indecision. It is trading at $1,732 level and it seems determined to climb higher in the short term. The price is located in the buyer's territory, it has taken out a strong dynamic resistance signaling further growth.
Gold is bullish and it will remain bullish as the global risk is high, at this moment, nobody knows how deep the economic crisis caused by COVID-19 will be. The yellow metal has decreased a little in the short term, only because the sentiment was positive after a while.
Gold has come back to test and retest the broken upper median line (UML) of the minor descending pitchfork, you can see that the price has failed to close below this dynamic support (resistance has turned into support) and now is fighting to stabilize above the R1 ($1,729) level.
The price was trapped within a down channel, between the median line (ML) and the upper median line (UML), the upside breakout signals a further increase. Still, I would like to see another higher high, an increase above the $1,744 level, to be certain that the breakout is valid and that the gold price will jump towards fresh new highs.
A further increase could be invalidated only if the price will drop and stabilize below the R1 ($1,729) and most important below the upper median line (UML). So, if the breakout is invalidated, the yellow metal could drop at least till the $1,700 psychological level.
- GOLD TRADING TIPS
We'll have a great long opportunity if the gold price makes another higher high. If it closes above the $1,744 level, the next targets are seen at the R2 ($1,774), and higher at the $1,800 level, right below the R3 ($1,804) level.
A short opportunity could arise if the price drops below the $1,721 former low and if it stabilizes below the upper median line (UML), this scenario will signal a drop towards the $1,700 - $1,1693, or lower towards the $1666 static support. This scenario is less likely to happen if the USD stays lower.
