Gold Price Analysis: Yellow metal forms a bull pennant
Gold looks to have formed a bullish pennant pattern on the daily, which comprises trendlines connecting higher lows and lower highs. The compression essentially represents a bull-bear tug of war. It is considered a bullish continuation pattern if its formation is preceded by a notable price gain, which is the case here.
The yellow metal rose from $1,455 to $1,747 during the three weeks to April 14 before carving out the contracting triangle. Such pennants usually end up paving the way for a stronger rally.
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Gold remains depressed below $1,700 amid broad US dollar strength
Gold prices remain on the back foot near $1,698 ahead of the Tokyo open on Tuesday. In doing so, the bullion remains pressured for the third day in a day. The reasons could be traced from the US dollar’s broad gains amid risk aversion as well as expectations of the economic restart.
While calls of economic re-open in major economic reignite optimism among traders, fears of the coronavirus (COVID-19) keeps the risk-off sentiment alive. The catalysts could be traced from the fresh increase in virus cases from Germany and the global epicenter Wuhan.
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