Gold Price Forecast: A potential bull flag calls for a retest of multi-year highs

  • Uphill task for gold bulls, as US dollar draws haven bids.
  • Coronavirus fears to continue to limit the downside.
  • Virus stats, US stimulus talks in focus amid a light docket.
  • Technical set up favors the bulls in the near-term.

Gold (XAU/USD) started out a fresh week on a cautious footing, despite the positive close last week around $1810 levels. Resurgent haven demand for the US dollar across the board amid renewed concerns over the continued rise in the coronavirus cases globally dampened the market mood.

However, worries over the mounting virus risks on the global economic recovery, the EU Summit deadlock and US stimulus talks will continue to underpin the yellow metal, in the absence of US economic data due later this Monday.

It’s worth noting that it could be an uphill task for the gold bulls to regain the upside momentum, as speculators reduced their bullish positions in gold (Comex contracts) and in the week to July 14.

Short-term technical outlook

Gold: One-hour chart

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A potential bull flag pattern is spotted on the hourly chart, with the pattern to get confirmed on a close above the falling trendline resistance at $1809.98 on an hourly basis.

A bullish breakout will call for a pattern target of $1827 in the coming days. In the meantime, the previous week of $1815.10 will challenge the bulls’ commitment.

The hourly Relative Strength Index (RSI) is trading flat but hold above the midline (50.0), suggesting more room to the upside.

Acceptance above the latter, the multi-year high at $1818.17 will be put to test, in a bid to test the $1820 round figure.

Alternatively, a cluster of supports is aligned around $1805, which is the level to beat for the bears in the near-term. That is the confluence of the 50, 100, 200-hourly Simple Moving Averages and falling trend line support.

Should the bulls fail to defend the aforesaid support, the next downside target is placed at the $1800 psychological level.

Gold: Additional levels to consider

XAU/USD

OVERVIEW
Today last price 1808.02
Today Daily Change -1.80
Today Daily Change % -0.10
Today daily open 1809.82
TRENDS
Daily SMA20 1785.81
Daily SMA50 1748.25
Daily SMA100 1696.33
Daily SMA200 1608.58
LEVELS
Previous Daily High 1811.98
Previous Daily Low 1795.98
Previous Weekly High 1815.1
Previous Weekly Low 1790.42
Previous Monthly High 1785.91
Previous Monthly Low 1670.76
Daily Fibonacci 38.2% 1805.87
Daily Fibonacci 61.8% 1802.09
Daily Pivot Point S1 1799.87
Daily Pivot Point S2 1789.93
Daily Pivot Point S3 1783.87
Daily Pivot Point R1 1815.87
Daily Pivot Point R2 1821.93
Daily Pivot Point R3 1831.87

 



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