Gold prices continue to move in a sideways trading range of 1,710 – 1,690, while the recently formed symmetric triangle pattern is stretching the trading range. The fresh trading range is likely to provide selling below 1,700 and buying above 1,680. The gold prices are exhibiting mixed bias in the wake of mixed risk sentiment as many nations have also joined the United States in this blame-game to China because of the increased number of deaths and the global economic slowdown, both caused by the coronavirus pandemic.
Britain has asked that China would have to answer about the information it shared about the outbreak. The US is formulating measures to hold China responsible for the damage caused by the pandemic. The measures would probably be the sanctions, new trade policies, and cancelation of US debt obligations.
On the other hand, on Sunda,y the US Secretary of State, Mike Pompeo, said that there was enormous evidence that the COVID-19 pandemic was originated in the Chinese Wuhan laboratory. All of the above news indicates the need for safe-haven and hence, gold surges above $1713 on Monday. Coronavirus has infected almost 3.5M people across the globe, and governments & central banks all over the world have announced considerable monetary and fiscal measures to reduce the economic damage.
On the macroeconomic data side, at 19:00 GMT, the Factory orders of the United States showed a decline of 10.3% in the month of March, which was previously expected to be declined by 9.2%. This weakened the US dollar across the board and added in the upward movement of gold prices.
On the technical front, gold has crossed below 50 periods EMA which is providing resistance around 1,701 level. Recent close of bearish engulfing on the 4-hour timeframe suggesting investor’s bias towards selling. On the higher side, a downward trendline may also extend resistance around 1,705, and below this level, we may see selling until 1,690 and 1,683 level today.
- Entry Price: Sell at 1695.83
- Take Profit 1683.83
- Stop Loss 1705.83
- Profit & Loss Per Standard Lot = -$1000/ +$1200
- Profit & Loss Per Micro Lot = -$100/+$120