Gold has not yet managed to recover after the $100 collapse
Gold has not yet managed to recover after the $100 collapse which followed Pfizer’s vaccine announcement as investors moved to riskier assets. The bullion price is stagnating at $1,870 without being able to achieve significant and stable recoveries. The main scenario remains risk on, even if it seems likely that some traders will take home some profits over the next few days with any consolidation on the stock market giving gold a welcome chance to breathe.
Technically the price remains in the main lateral channel between $1,850 and $2,070. Gold is trading close to the lower end of that range and a clear break down of this level could open space for further declines. This scenario seems unlikely from a fundamental point of view, while investment demand remains so strong.
Carlo Alberto De Casa – Chief analyst, ActivTrades
The stock market showed signs of slowing down in Europe on Thursday, despite a bullish correction in Chinese tech shares overnight, as the initial enthusiasm over a vaccine starts to wane. The worsening virus situation in many hotspots is weighing on market sentiment as it sparks fears of tougher containment measures that could bring further economic damage. While a bearish correction after the rally over the past few days would be logical and even healthy, fears of a W-shaped recovery are occupying more and more space in investors‘ minds. Today’s session is likely to remain volatile as investors will have to cautiously monitor speeches from top central bankers at the ECB forum as well as major macro data from the US (CPI and jobless claims). Technically, European benchmarks remain capped by major resistance, with buyers not strong enough to push the market higher. The DAX-30 Index has significant short-term resistance as 13,245pts and then 13,450pts. The first supports can be found just above 13,100pts and 12,900pts before the 23.6% retracement ratio at 12,825pts.
Pierre Veyret– Technical analyst, ActivTrades
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