Gold is trading in a roller coaster since few weeks. Even last week gold tested 1710$ after making lows of 1679$. Xauusd settled below 1700$ at Friday’s closing. Spot gold ruined many traders in past with its 50-60$ move in single day. Last Friday gold higher move came when Dow Jones lost more than 500 points from its day’s peak.
Dow Jones crashed after US posted another big Unemployment claim numbers. US already showed heavy decline in personal spending and income. Which is a concern for long term. Next week we have Unemployment rate which may shoot from 4.4% to 14-16% . This could hamper dow jones recovery chances even more and may send gold on frenzy mode. Another lifetime high near 2000$ for gold not ruled out.
Major reason of gold higher price is declining job numbers and economic growth around the world. This Corona Virus pandemic situation has caught all vulnerable off guards and we will see devastating numbers in next 3-4 quarters. This is major reason I am bullish on gold for 2020. I will change my forecast if technical chart changes and economies shows some better growth than expected.
For now major focus will be on Unemployment rate. Many analysts are predicting from 14-16% unemployment rate. Which is not far from great depression’s rate of 25%. In great depression 25% of americans were unemployed. So we are not very far from great depression numbers and its gonna get worse before recovery.
Currently gold stayed below 1700$/oz which is a bit weak on weekly charts. But a good support in spot gold chart stands at 1640$. If trader breaks and close below this base. Then expect good pressure in gold till 1600$- 1550$.
Resistance in gold stands at 1731$. If xauusd break and close above 1731$. Then expect good rise in gold till 1770$- 1800$.
Conclusion Fundamentally & Technically gold is in positive zone. Avoid selling this precious metals. If you wish to scalp in sell then trade with strict stop loss.
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