Gold extends its bullish movement

Uncertainties brewing across the global market as coronavirus continue to spread. Numbers of infection continue to rise and death tolls also higher. Although the rate of increase slowed in China, it did not outside of China. The impact toward the economy will be massive and gold prices could shine under this situation.

This week, OPEC adds more fuel to gold bullish pressure. The cartel could not reach a deal with its non-OPEC allies which lead to oil prices war. oil prices down 30% today and might continue lower without any deal for a production cut.

Click here to see the Gold February 2020 forecast.

New Month

Monthly Chart

The only direction of gold is bullish for now as the coronavirus outbreak spook the market. No reason to take bearish positions in the precious metal. However, gold has reached the top of the channel and might show bearish signs. If the price move lower then traders could observe the price reaction near the closest support level.

Long positions preferred to short positions as gold might reach as high as 2011 high if the global market situation continues to worsen.

Weekly Chart

Previously on the weekly chart, gold formed a major bearish close but could not make a bearish confirmation below the candlestick. Last week, the price made bullish jump and closed above the bearish candlestick opening level. Today, gold continues to add more gain by opening higher. It seems no reason to take a short position in gold prices yet. Traders will continue to monitor the price reaction near the top of the channel for now.

Daily Chart

The only strategy to apply on the daily chart is waiting for a bearish correction in gold prices to enter long positions. We have an initial bearish reaction today. If the bear could maintain the bearish pressure and push the price further lower then it is possible gold will start correction toward $1,600 and $1,586.15.

Trade Plan

Bullish trade – Wait until correction toward $1,600.00 or $1,586.15. If the price form bullish reaction near both support levels then traders could start adding more long positions.

Bearish trade – No suggestion, for now, gold bullish pressure expected to continue building up as the world situation becomes more uncertain.