Gold hits seven-year high on safe-haven buying despite optimistic signals over coronavirus case
Spot gold extends steep ascend on Thursday, inflated by strong safe-haven demand on fears of coronavirus spread outside China, despite signs of strong drop in the number of new cases and PBOC’s cut of benchmark lending rate, in attempts to support the economy and reduce negative impact from virus outbreak.
The yellow metal rose to new seven-year high ($1619) after breaking previous top at $1611 (posted on 8 Jan).
Gold price is currently riding on extended wave C of five-wave sequence from $1547 and pressures its FE200% at $1621, violation of which would expose Fibonacci expansion level at $1632 (238.2%).
Caution of bulls losing traction on fresh dollar’s advance, overbought daily stochastic / RSI, while bullish momentum is fading.
Corrective dips below $1600 handle are expected to offer better buying opportunities while contained above $1590 zone (near Fibo 38.2% of $1547/$1619 upleg).
Rising 10DMA ($1584, also near 50% retracement) marks pivotal support, break of which would put bulls on hold.
Res: 1619; 1621; 1632; 1639
Sup: 1603; 1600; 1591; 1584