On Monday, the price of gold during the Asian session fell after testing the mark of $ 1,700 per ounce.
The driver for growth in quotations at the opening of the trading session was the situation in oil and the stock market. The decision of Saudi Arabia to increase oil production amid falling global demand for energy has led to a collapse in oil prices by almost 30%. The stock market reacted immediately. Asian indices fell more than 3%, the Australian S&P / ASX 200 lost more than 7%. Demand for gold and other protective assets rose sharply, which led to an increase of gold prices to the psychologically important mark of $ 1,700. But here the bulls met quite a strong resistance. Many investors began to fix long positions in gold, which provoked the development of a retreat.
Despite a local decline in quotations, a positive background for gold still prevails on the market. Many experts talked about the impending global economic crisis, which in scale may be stronger than the 2008 crisis. In this situation, gold will be the main protection against rising risks.
There is no important news in the economic calendar today, therefore, the main focus on trading will be provided by the situation on stock exchanges and the debt securities market.
Regarding the intraday chart, it is worth paying attention to the level of 1675.00. As long as the price remains below the priority level, development of corrective movement in the direction of levels 1650.00 and 1635.00 will be possible. With the growth of quotes above the level of 1675.00, we can expect a resistance retest at the level of 1700.00.
Resistance Levels: 1675.00, 1700.00, 1720.00;
Support Levels: 1650.00, 1635.00, 1605.00.
The main scenario - a decline towards 1650.00.
An alternative scenario - a breakdown of resistance at the level of 1675.00 and an increase towards 1700.00.
The fundamental outlook is moderately positive. We consider longs from the levels of 1650.00 and 1635.00