Sunday, 3 January 2021

Gold Closed a Choppy Year with Strong Gains

 By Deya Hroob




Gold stabilized with the continued losses of the dollar, heading to achieve the best annual performance in a decade, affected by economic uncertainty and the distribution of countries around the world huge incentives to reduce the impact of Corona on their economies.

 

The precious metal has gained 25% since the beginning of 2020, as central banks and governments around the world have adopted economic stimulus measures, paving the way for higher inflation and a decline in the value of currencies

And gold, which is considered a hedge against inflation this year, benefited from unprecedented stimulus measures and lower interest rates to cushion the impact of the blow to economies from the pandemic.


GOLD Technical Analysis

 

Daily Chart :




Gold is trading inside a descending channel. It's now on the resistance line of the channel. A break above the channel and the $1900 resistance could start a new uptrend that could reach $1960 then to the psychological resistance level at $2000

However, if the price turns down from the current levels or the resistance line of the channel the first support will be 50-day EMA,  then the bears will try to drag the precious metal to the 200-day EMA  support ( now at $1812)

4H Chart :




GOLD has been facing resistance near the $1900 level for the past few days. It's also trading in a rising wedge.

 If the bulls can push and sustain the price above the resistance structure, GOLD may go the upper line of the rising wedge. If price breaks up the rising wedge, $1960 will be the next resistance.

On the contrary, if price fails to break this stiff resistance , GOLD may drop to $1870 , then 1812 is expected.


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