Gold edges higher as banks begin easing programme
- 2020-03-27
Central banks including the ECB, Bank of England and the Fed has begun and even extended their QE programmes, purchasing government bonds, injecting money in hope to accelerate the economy amid the rapid spread of the pandemic. Exceptionally lifting the price of gold to 1543 on Monday open, further reaching 1644 level in yesterday’s trading session due to the shortage of the product, tightening the supply in the underlying market. Nonetheless, a record high over 3m jobless claim in the US had participation to this rise too. Under normal circumstances when the globe faces economic recessions, gold price tends to surge as it is considered as a safe haven product and it’s been performing during the current crisis.
After Monday’s surge touching 1635 on Tuesday Asia’s open, it has been consistently trading over 1600 and floating between a $50 range to 1650, several times breaking through the previous resistance at 1636. Price mainly staying on the top zone of the Fibonacci retracement and has been constantly hitting the shoulder 23.6% level and rebounds back up. No high expectation on huge fluctuation in the short run however, it could potentially hit 1680 in the mid-long term or even eyeing to surpass the 1700 level in the year.
Daily pivot point – 1623.63
S1 – 1602.98 R1 – 1649.35
S2 – 1577.26 R2 – 1670.00
S3 – 1530.89 R3 – 1716.37
Short term traders could sell at day-high 1627, looking fall back to take-profit level at 1617 and not to forget stop-loss at 1640. Long term traders could enter long at 1622 eyeing to profit at 1636 and stop loss at 1610.
Analyzed by: Mr. Ronald Wu, Independent Analyst