The price of gold this week continued to recover towards its current multi-year highs of $1,700 after a series of disappointing US economic data. The gold price is now pegged just below $1,645 amid the recent rebound off a multi-month low of about $1,448.
The price of the yellow metal made a late pullback on Wednesday to push it off overbought levels of the 60-min RSI. Gold still trades relatively higher above the current levels of the 100-hour and the 200-hour SMA lines.
Gold Price Fundamentals Overview
From a fundamental perspective, gold is trading at a time of financial turmoil amid the coronavirus pandemic. The deadly disease has claimed nearly 90,000 lives according to statistics with infections nearing 1.5 million. This has crippled global financial markets amid country lockdowns which continue to affect business activity. People have lost their jobs while others have had their salaries reduced. This has put the global markets on high alert in readiness for a huge financial crash.
Besides this economic data has continued to disappoint. Last week, the US non-farm payrolls missed expectations. Unemployment continued to tick higher while the initial jobless claims are into 10s of millions, a new historical high. With interest rates reduced to the bare minimum, another round of rate cuts could push the funds to negative territories which would add pressure to the greenback. The gold price stands to benefit from the existence of financial crises.
Gold Price Technical Analysis (the 60-min Chart)
Technically, the gold price appears to be trading within a consolidative rising wedge, which indicates a short-term bullish bias in the market sentiment. However, the price of the yellow metal also appears to be approaching a region of strong resistance just above $1,670. This could trigger a short-term pullback.
Therefore, the bears will be targeting pullback profits at around $1,632 or lower at $1,616. On the other hand, the bulls will look to extend the current bull-run towards $1,658 or higher to $1,670.
Gold Price Technical Analysis (the Daily Chart)
In the daily chart, the price of gold appears to be nearing full recovery after surging past the 76.40% fib level. The price of the yellow metal recently bottomed at $1,448 but has now recouped those losses to trade at $1,645, just $55.00 off the current multi-year highs of $1,700.
The bulls will look to extend gains towards the $1,676 level or higher at $1,700. On the other hand, the bears will target profits at around $1,609 or lower at $1,578.