GOLD : Rally as USD Drop
(Tue, 1 Sep 2020). The price of gold looks likely to re-test the $2,000/oz. barrier again, fuelled by ongoing US dollar weakness with the DXY hitting a 28-month low in early trade. The weakness in the US dollar continues to be the main driver of gold’s price action and while this trend looks likely to continue, the slide lower in the greenback may slow in the short-term after hitting a 2-year+ low, dabbing the brakes on gold’s recent rally. The CCI indicator shows gold in heavily oversold territory, adding a note of caution.
Gold continues to respect the positive trendline that started in late-March and has broken a series of short-term lower highs from the August 6 high. The precious metal is also back above the 20-dma, highlighting positive sentiment, while the CCI indicator is not yet in overbought territory although this looks likely to change in the coming days. Support is seen around $1,918/oz. from both trend and the 50-day moving average. Resistance currently at $2,000/0z. followed by two recent highs at $2,007/oz. and $2,016/oz.
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