Gold Intraday: Even Stronger Momentum
George Lam July 22, 2020 3:31 AM
Yesterday, we mentioned that expansionary fiscal policy should continue to provide support to gold prices, now it has gathered more upside momentum...
On Tuesday, spot gold advanced 1.3% to $1,842, but seemingly lagging as compared with a 7.0% rally in silver, which jumped 4.8% further during Asian trading hours today.
European Union leaders have finally reached an agreement on a 750 billion euros stimulus package, while another round of U.S. fiscal support is expected to be released this week, commodity prices were buoyed by optimism over increasing industrial and infrastructure demand. Yesterday, we mentioned that expansionary fiscal policy should continue to provide support to gold prices.
From a technical point of view, spot gold has gathered more upside momentum after breaking above a 2-week consolidation range as shown on the 1-hour chart. In fact, it has broken above its previous high without showing a bearish RSI divergence. Bullish investors might consider $1,838 as the nearest intraday support, which is also the 61.8% Fibonacci retracement level of the rally started from July 17. The 1st and 2nd resistances are likely to be located at $1,880 and $1.890 respectively. In an alternative scenario, a break below $1,838 might trigger a pull-back to test the next support at $1,830.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.