- Uncertainty surrounding Trump’s COVID illness resulted in a brief rally in gold to levels above 1,900.
- Declines are likely to resume in the new week, as highlighted by the retracing RSI.
Gold rallied significantly following the news that the US President, Donald Trump, had tested positive for COVID-19. The uncertainty saw stocks in the United States and Asia tank, with some even erasing gains in the recent past. The precious metal traded marginally above 1,900, allowing investors to hedge against the stock market.
XAU/USD closed the trading on Friday at 1,897, following a retreat from levels slightly above 1,900. The asset is likely to continue with the retreat on Monday, especially with the Relative Strength Index retracing after hitting pause at the midline.
XAU/USD daily chart
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On the other hand, the Moving Average Convergence Divergence (MACD) highlights the possibility of consolidation taking precedence. However, if losses continue, the MACD may confirm the downtrend with a bearish divergence. The formation of a descending triangle shows the possibility of a breakdown to 1,800 coming into the picture.
It is worth mentioning that if XAU/USD bounces off the triangle support, the bearish case to 1,800 will be invalidated. Gains above the triangle resistance could pave the way for action above the 50-day Simple Moving Average (SMA). Gold bullish case to 2,000 is within reach but awaiting confirmation as long as the price steps above the 50 SMA.
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