Gold Shows Strong Technical Projection for Further Gains

Gold (XAU/USD) experienced a slight dip to the $1,742 level in the mid-European session today before jumping to fresh monthly highs just a few hours ago. This bull rally was primarily as a result of Friday’s break above the $1,730 pivot/supply level.

This price boost is further underpinned by the bullish bias of technical indicators across most time frames many of which indicate that gold is still considerably far from being in the overbought territory. This means that a move above multi-year highs ($1,765) now looks even more possible.

A slight positive momentum in the US equity markets was largely counteracted by a broad-based USD weakness. This, coupled with the growing fears of a second wave of the Coronavirus, has given the dollar-denominated commodity even more bullish momentum for a price extension.

Meanwhile, the $1,742 region now seems to have become a major support for gold and any drop below that level will likely be regarded as a buying opportunity. This will further strengthen the key $1,730-35 pivot region against any sell momentum.

On the flip side, in a scenario where this key pivot level fails to hold, gold could experience a sharp decline to the $1,722-17 level which could open the door for steeper declines.

At press time, gold is battling with the resistance line of our ascending channel at $1,756 and we are likely to see a $1,770 price tag in the coming days.

Gold (XAU) Value Forecast — June 22

XAU/USD Major Bias: Bullish

Supply Levels: $1,765, $1,770, and $1,775

Demand Levels: $1,753, $1,745, and $1,735

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