Gold finally has a corrective move – but still clearly bullish
Source: Economic Events April 22, 2020 - Admiral Markets' Forex Calendar
After Gold pushed above 1,700 USD for the first time since 2012, marking new yearly highs, the precious metal is now seeing a correction, even though the overall bullish picture hasn't substantially changed.
A potential technical driver for the current corrective move is the potential bearish divergence in the RSI(14) on the daily time-frame pointing which pointed to some diminishing bullish momentum and left the break to new highs already at an earlier time with a grain of salt in our opinion.
The first potential target can now be found around 1,650 USD, but looking at Gold from a purely technical perspective leaves us with a clearly bullish impression as long as we trade above 1,440/450 USD, a little shorter above 1,555 USD.
Fundamentally, in the short-term, a new wave of de-leveraging hitting global financial markets remains an option, mainly driven by the given global USD shortage, resulting in a new wave of aggressive selling in Gold due to liquidity reasons.
Mid- to long-term Gold stays bullish, especially given the massive monetary stimulus from the Fed over the last weeks with pumping its balance sheet to now over six trillion USD:
Source: Admiral Markets MT5 with MT5SE Add-on Gold Daily chart (between January 21, 2019, to April 21, 2020). Accessed: April 21, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of Gold fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.
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