Gold leaps above crucial resistance as election unpredictability sets off safe-haven need

Gold is staging a strong return in the past couple of days as the rate of the yellow metal keeps moving closer to the $2,000 mark on the back of election unpredictability and other risks looming in the background for global monetary markets.

The cost of the rare-earth element is up 0.35% this morning at $1,956 per ounce after jumping as much as 2.45% the other day as a result of a weaker dollar and amidst higher demand connected with increased uncertainty relating to the result of the US governmental election.

Gold has actually published gains in 5 out of the 6 last commodity trading sessions and is now approaching its late-September levels while the price is also simply 2.4% far from the $2,000 mental threshold.

The present background is preferring gold rates as investors are overdoing the safe-haven as a hedge against potential pullbacks in the equities– which have actually rallied furiously in the past couple of days regardless of the installing level of danger associated with record-level virus cases in the United States and the introduction of lockdowns in Europe.

President Donald Trump has actually contributed to this environment as he has actually consistently made accusations of election scams– in spite of not showing any difficult evidence to back his claim– while stating that he will object to each and every single lead to the states where he has actually apparently lost for a narrow distinction.

Meanwhile, the North American country reported yesterday the highest daily virus tally because the pandemic begun, with a little more than 118,000 Americans being contaminated by the disease during those 24 hr while the variety of deaths stood above 1,000 deceases per day according to data from virus-tracking site Worldometers.

A similar situation is happening in Europe as well, as the United Kingdom, Germany, Italy, France, and other important nations of the area keep seeing the number of everyday cases surge to tape highs despite the reintroduction of lockdowns.

What’s next for gold?

Gold (XAUUSD) cost chart– 1-day candles see with volume, RSI, and MACD– Source: TradingView

Gold’s most current rate action has been the most fascinating in months, as the cost of the yellow metal has leapt above a downward cost channel that emerged after the product dropped from its $2,070 all-time high.

This channel– together with the uptrend that preceded it– wound up forming a bullish pattern referred to as a bull flag– which indicates that an extension of the previous pattern need to happen after the price consolidates for a while.

The other day’s jump along with today’s shy advance are successfully breaking the upper pattern line of this formation and this move is being accompanied by a buy signal given by the MACD together with two bullish candle lights seen in the last 2 sessions that can be found in combination with above-average trading volumes.

A first target for gold at this moment could be set at $2,020 per ounce– the yellow metal’s 19 August high– with all-time highs on sight right after that if the bullish momentum continues. This represents a prospective short-term upside of 3.3% and 5.9% respectively.

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