Gold above strong supports but significant resistance looms

The bullion held its post-Fed gains and consolidated on Wednesday, but on Thursday, it ticked higher again as equities gave up some of their profits. During the London session, gold was trading half a percent stronger, seen at around 1,645 USD.

Gold is still trading above the short-term uptrend line, which is positive. Moreover, it managed to jump above the previous lows of 1,625 USD, which is also positive. Thus, the short-term outlook seems bullish as long as gold remains above these supports.

The price is now rising toward the first significant resistance in the 1,650 - 1,660 USD area, which has sent the price lower for a couple of times already. However, if this resistance is broken to the upside, gold could quickly rise toward the actual cycle highs of 1,690 USD, with a possible test of the psychological level of 1,700 USD.

The coronavirus outbreak is getting out of control in the US and the EU, and central banks across the globe are loosening monetary policies, which should keep gold supported over the near term.

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