XAU/USD: it is worth being more careful with gold sales
17/04/2020
After the beginning of last month, the XAU / USD pair reached more than a 7-year high near the mark of 1703.00, over the next 2 weeks it fell by 250 points (more than 17%), to the mark of 1452.00.
However, the strong support level of 1484.00 (Fibonacci level 50% of the correction to the wave of decline since September 2011 and the level of 1920.00 and ЕМА200 on the daily chart at that time) resisted. The price rebounded from the level of 1484.00 and again rushed up amid the aggressive stimulating actions of the Fed and the weakening dollar, as well as investors' caution regarding the spread of coronavirus in the world. In this situation, the demand for protective assets, including gold, will remain.
Global stocks rose sharply on Friday, and demand for defensive assets, such as government bonds and gold, fell after Gilead Sciences Inc., an American company, reported that its experimental drug showed good results in clinical trials in patients with Covid-19.
Financial market participants also ignored today's data from China, which indicated a sharp slowdown in the world's second largest economy.
Despite the official Chinese macro data showing that China's GDP in the 1st quarter of 2020 fell by 6.8% (in annual terms), which was the first such strong reduction since the beginning of the quarterly statistics in 1992, during today's Asian session gold quotes declined. The publication of important macro statistics in the second half of today's trading day is not expected. Therefore, in the absence of new negative information, in particular about coronavirus, gold quotes are likely to remain under pressure.
Nevertheless, the peak of the epidemic has not yet been passed, and a turning point in the negative trend of the global economy has not yet occurred.
Demand for defensive assets is also likely to remain.
At the beginning of today's European session, XAU / USD is traded near the short-term important support level of 1685.00 (ЕМА200 on the 1-hour chart).
Above 1630.00 mark, through which the middle of the rising channel on the daily chart also passes, it is necessary to give preference to long positions. Above the support level of 1525.00 (EMA200 on the daily chart), the long-term positive dynamics of XAU / USD remains.
Support Levels: 1685.00, 1630.00, 1587.00, 1575.00, 1555.00, 1538.00, 1525.00, 1484.00
Resistance Levels: 1700.00, 1718.00, 1747.00
Trading Recommendations
Sell Stop 1670.00. Stop-Loss 1720.00. Take-Profit 1630.00, 1587.00, 1575.00, 1555.00, 1538.00, 1525.00
Buy in the market. Stop-Loss 1670.00. Take-Profit 1700.00, 1718.00, 1747.00
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