Gold Forecast:
- Gold established a higher high this week, moving above its April peak
- In turn, the precious metal may look to attack overhead resistance around the $1,800 mark
- Since talks of stimulus and monetary easing continue to take place, the longer term outlook for gold remains constructive
Gold Price Takes Aim at 2012 Peak Near $1,800 as Climb Continues
Gold has enjoyed a boost in recent weeks as the initial forces that sparked a selloff and immense volatility in March have subsided. At the same time, the longer term implications of low interest rates and massive stimulus programs has likely helped to propel the metal higher. As a result, XAU/USD has passed its prior May high around $1,747 and looks to be taking aim at subsequent resistance around the metal’s September 2012 apex near $1,800.
Gold Price Chart: Weekly Time Frame (June 2011 – May 2020)
To be sure, other price levels may influence gold on an intraday basis, but for the time being it seems $1,800 is the next major hurdle for the commodity in its remarkable climb higher. Should price break through the level, the 2011 swing high around $1,920 may be next on the list. Either way, the string of consecutively higher-highs is an encouraging technical sign for the yellow metal going forward.
Gold Price Chart: 4 – Hour Time Frame (January 2020 – May 2020)
In the shorter term, lower retracements will likely encounter nearby support around $1,714 where a longstanding Fibonacci level intersects an ascending trendline projection from January. Both levels have shown their ability to influence price in the past, so the area is liable to do so again.
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Deeper losses could see the metal probe $1,650 and $1,587 if bearishness becomes particularly extreme. That being said, as long as gold can stave off losses beneath the March low near $1,450, it is my opinion the metal remains an tilted to the upside. the meantime, follow @PeterHanksFX on Twitter for updates.
--Written by Peter Hanks, Analyst for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX
