Gold has had a strong bullish start in 2020 by breaking the 1600 high point in the past decade. As the macroeconomic situation worsens with the spread of the COVID-19 virus, the safe heaven asset’s price appreciation appears to be slowing down despite having a strong uptrend momentum. However, based on current technical indicators, the strong bullish momentum should continue, but not before short-term correction.

• The RSI bearish divergence happened on Monday (9^th of March), where prices briefly hit above 1700 psychological level before closing strongly below the 1700 level, signalling a weak bullish momentum.
• Based on the Fibonacci retracement level of 1,571.42 – 1,703.22, prices have been breaking below the 50% retracement level strongly. The price momentum of the candlestick also indicates that Gold has the potential to correct further downward to the 45 – 1,600.00 region and rebound briefly before further downward correction towards the 127.2% extension level where the demand level is.
• Both the moving averages and trend analysis suggest that the Gold is still on a strong uptrend. Hence the possibility of a bearish downtrend is unlikely unless 1475.00 support level is broken.

CHART LEGENDS

Simple Moving Average

Red dotted line = 200 SMA

Blue dotted line = 50 SMA