Gold: bullish forecasts

Gold: bullish forecasts

2020-12-02 • Updated

XAU/USD is eyeing $1 850. Will it be able to reach it?

What happened?

Stimulus talks have resumed in the USA. US lawmakers proposed to unveil an aid of $908 billion. The combination of US stimulus hopes and negative real yields pushed the USD down and gold up. Elsewhere, Fed’s Powell held a meeting yesterday and gave quite dark comments about the current economic state. According to him, the recovery path is still uncertain, and the US economic activity is severely damaged. The widespread vaccinations are going to start soon if vaccines pass approval. However, the economy won’t quickly recover after it happens, it will need more time to rebound, and we will see some downbeat data for a while.

Technical tips

Gold has turned to the upside after touching the support of $1 770. It has broken through the 50-period moving average, so the way up to the 38.2% Fibonacci retracement level of $1 840 is clear now. It may meet some selling pressure near this level. However, if it manages to break through it, the way up to the 50% Fibo level of $1 865 will be clear. In the opposite scenario, if it drops below the intraday low of $1 810, it may fall to the key support of $1 800.

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