Chart of the Day: Spot Gold

Chart of the Day: Spot Gold (14/10/2020) |

The spot gold market is currently up 0.35% trading around the 1900.00 level. During the early hours of the European session, there have been reports of a stall in the Brexit talks which has seen the Sterling Pound decline. Other concerns surround further stimulus to shore up the U.S. economy as a result of the coronavirus pandemic as well as a halt on further clinical trials by Johnson and Johnson and Eli Lilly as one of the participants succumbs to a mysterious illness. These factors have contributed to Dollar strength causing the Dollar Index to close yesterday at 93.53 (+ 0.53%). In today’s trading it has traded above yesterday’s high at 93.60 which indicates a continuation of Dollar strength, although encountering resistance in the form of the 9, 20 and 50 daily EMA between 93.49 – 93.76. Although it has broken out its upward sloping channel, I believe the 93.00 level is currently acting as support in the context of a much bigger support between 93.24 – 92.67 on 10/09/2020 with lower price rejection thereby confirming my bullish bias. A key resistance area for Gold is 1907 and as price is currently below this level and is still making lower lows and lower highs, I anticipate further weakness particularly as the U.S. election draws closer. Gold is currently trading below its 9,20 and 50 daily EMA in the midst a downward sloping channel with the potential of moving significantly lower towards 1753 which coincides with its daily 200 EMA.

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