Gold (XAU/USD) has replicated Wednesday’s move this Thursday, having recorded fresh nine-year highs at $1876.66 before the quick retracement. A rising wedge and bearish RSI are spotted on the hourly chart, as FXStreet’s Dhwani Mehta notes.
Key quotes
“The greenback could catch a fresh bid-wave if the risk-off trades pick-up pace on further US-China escalation. This could prompt a correction in the bright metal, although the downside will likely remain cushioned by the continued surge in coronavirus cases. Meanwhile, the massive stimulus deployed globally will continue boosting the attractiveness of the non-yielding gold. The focus also remains on the US Jobless Claims data and the discussion on the next round of the US fiscal stimulus.”
“Gold has carved out a rising wedge formation on the hourly chart, having managed to hold above the rising trendline support and 21-hourly Simple Moving Average (HMA) confluence around $1864. A breach of the latter will validate the patter and trigger a fresh corrective move lower, with the downside target at $1850 in sight. A bearish Relative Strength Index (RSI) and price divergence is spotted, suggesting that the downside risks remain in play.”
“The immediate hurdle for the buyers is aligned at the rising trendline resistance at $1878, close to the multi-year high. Beyond which the $1900 mark could be eyed.”
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