Gold holding out near $1,550

Gold was shining when the coronavirus outbreak hit the market. We have a major pullback in the market and gold prices soar to $11,586.15 resistance. This month, there is news that China PBOC injected massive stimulus to the market also plans to roll back tariff against U.S products.

Positive news also comes on the coronavirus issue as new drugs to cure the virus. China will start human trials for the drugs now. Gold prices might stall and wait for further development of the coronavirus situation.

Click here to see the Gold January 2020 forecast.

New Month

Monthly Chart

Gold printed higher high in the previous month following the outbreak of coronavirus in China. Fears spread in the market and we have a major pullback in the equity market. However, this month the situation cools as China injected the market with massive stimulus.

If the coronavirus could be contained and cured then gold might start moving lower. Technically, gold still has more room upside toward the top of the channel.

Weekly Chart

We have a bearish pullback this week and gold starts moving lower from the $1,586.15 resistance. At the current time, the precious metal supported by the $1,550 support level. If it could maintain the level above $1,550 by the end of week then gold might stick inside $1,550 – $1,586.15.

A close below $1,550 could trigger bearish correction toward $1,500

Daily Chart

Gold retraced from $1,586.15 to $1,550 support level in two days. The precious metal currently testing the support level and looking to maintain the level above it. As long as no breakout and close below the support level then gold might continue its bullish movement.

Trade Plan

Bullish trade – Wait until a bearish correction toward $1,550 happens. Only enter when the bearish pressure recedes and the price shows a bullish close. (The retracement has happened). It is time to observe and enter long positions when there is a bullish reaction.

Bearish trade – The short from $1,586.15 has been played and bear traders are waiting for a breakout below $1,550. Without any breakout below $1,550 then it might be the time to take the profit out of the table.