Additionally, as gold is now in a medium and long-term uptrend, this formation could be an excellent sign for bulls to reenter the market with new long positions as it looks like a correction pattern in an uptrend.
However, for now, gold seemed to be lacking significant bullish momentum and was trading only half a percent higher during the London session on Thursday, changing hands at around 1,650 USD.
The support could be seen at the broken, bearish trend line, which is near 1,640 USD, and as long as the bullion remains above it, the short-term outlook appears bullish. Another support should be at this week's lows of 1,625 USD.
On the upside, the resistance could be located at around 1,655 USD, and gold is having problems to breach above this selling zone. However, if bulls are successful, we could see a quick rally toward the current cycle highs of 1,690 USD.
Sentiment still seems very negative as the virus continues to spread, which could benefit safe havens, such as gold.