Gold Snaps Multi-Session Resistance as Risk-Off Investors’ Sentiment Intensifies

Gold Snaps Multi-Session Resistance as Risk-Off Investors’ Sentiment Intensifies

Gold (XAU/USD) has capitalized on its recent bounce and has now recorded new multi-year highs around the $1,827 resistance in the early European session on Tuesday.

The safe-haven appeal for the yellow metal was greatly supported by the European Union leaders’ agreement to an impressive €750 billion stimulus package coupled with the prospects for additional stimulus in the US.

This rally occurred when buyers were coming on board to take gold higher after it climbed above the $1,814-15 resistance level, which prompted a follow-through bull trend (technically) in the early trading hours on Tuesday.

Meanwhile, the fresh optimism over a potential Covid-19 vaccine kept the financial markets in a risk-on mood. This sentiment tends to undermine the safe-haven appeal of gold and compels to traders to take some profits off the table.

Nonetheless, any pullback from this level will be considered a dip-buying opportunity considering that several strong support levels are in place.

XAUUSD – Hourly Chart

Gold (XAU) Value Forecast — July 21

XAU/USD Major Bias: Bullish

Supply Levels: $1,827, $1,830, and $1,840

Demand Levels: $1,818, $1,815, and $1,810

As we projected yesterday, gold has snapped the strong and protracted $1,815-18 resistance region, after it found fresh buyers above the $1,815 level. At press time, gold is flirting with the $1,827 resistance. It would be interesting to see how price reacts to this level.

Meanwhile, we are currently treading into overbought territory above the 4.00 line on our hourly MACD indicator. Reaching this level could precipitate a modest decline, which will inadvertently open gold up to more dip-buyers.

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