Trading | 1 month ago
As the next wave of pandemic has already started taking a toll on the global economy, the investors will either go for gold or for the US dollar. Analysts expect that gold will once again prove itself to be a safe haven bid against the US dollar as the uncertainty regarding the economy will grow.
The COVID-19 cases involving the highly contagious delta variant continues to grow across the world and has forced the countries including South Korea, Japan, Australia and few European countries announced the restrictive measures to deal with the next wave of pandemic. Reports from various countries indicates that the effect of next wave of pandemic on the economy will be substantial. As a result the governments across the world, have accelerated the vaccination program for their citizens.
The bears pulled back gold price on Friday and Monday, therefore the price of gold fell by almost 1.5% in the last two trading sessions. However, an increase in demand from the foreign institutional investors, high net worth individuals and domestic institutional investors would provide support for the precious metal.
Looking at the daily chart of gold, the formation of double bottom Candlestick chart pattern in the month of June is a clear indication of bullish momentum. Therefore, the long-term technical outlook for gold is bullish and one must look for buying opportunities in gold at the dip near $1800 support level.
From this support level the price may continue to increase towards the next resistance level at $1,845 and then towards the $1900 level. However, one must beware of the fake breakouts in gold. To confirm the breakout, look for the bullish engulfing candle stick formation near the resistance level.
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