On Tuesday, gold price is decreasing amid the recovery in global stock indices. Investors react to the positive statements of the US and Japanese leaders regarding the possible use of additional measures of economic stimulation.
Today, Donald Trump announced his intention to discuss measures aimed at mitigating the effects of the coronavirus epidemic with Congress. In particular, the possibility of reducing the payroll tax and a support program for those whose salary depends on the number of hours worked will be discussed. This afternoon, Trump promised to hold a press conference. Perhaps this event will be the main news of today.
The possible implication of additional measures to stimulate the economy was announced by the Prime Minister and the head of the Bank of Japan. Shinzo Abe noted that the government will closely cooperate and coordinate with the Central Bank.
However, global demand for protective assets remains high, so gold remains an opportunity for renewed growth. The stimulating factor for gold price is the USD dynamics.
Uncertainty has increased on the chart. The bulls could not overcome the psychologically important level of 1700.00. A strong resistance area was formed a little below this level. Therefore, the option to reduce quotations towards the area of 1635.00 is now a higher priority.
Resistance Levels: 1680.00, 1700.00, 1720.00;
Support Levels: 1650.00, 1635.00, 1605.00.
The main scenario - an increase towards 1680.00 and a decrease towards 1635.00
An alternative scenario - a decline towards 1635.00 from current levels.
The fundamental outlook is neutral. We consider shorts of the instrument from the levels of 1670.00 and 1680.00.