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Gold Technical Analysis - Gold Trading: 2020-06-03
Gold Technical Analysis Summary
Below 1693.53
Sell Stop
Above 1748.74
Stop Loss
| Indicator | Signal |
| RSI | Sell |
| MACD | Sell |
| Donchian Channel | Sell |
| MA(200) | Buy |
| Fractals | Sell |
| Parabolic SAR | Sell |
Gold Chart Analysis
Gold Technical Analysis
On the daily timeframe the XAUUSD: D1 is retracing lower above the 200-day moving average MA(200), after hitting 8-year high in mid-May. The RSI has formed a bearish divergence. We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 1693.53. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian boundary at 1748.74. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (1748.74) without reaching the order (1693.53), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
Fundamental Analysis of Precious Metals - Gold
Manufacturing data indicate global economy downturn is easing. Will the XAUUSD price continue declining?
Global downturn is easing as governments began to ease the tough coronavirus-led lockdown measures. While factory activity still contracted globally in May, contraction slowed as evidenced by purchasing managers indexes for Europe, US and China. Thus, Markit’s Manufacturing Purchasing Managers’ Index (PMI) for the euro zone rose to 39.4 in May from 33.4 in previous month. The US Institute for Supply Management report showed its manufacturing index rose to 43.1 in May from an 11-year low of 41.5 in April. China's official manufacturing purchasing managers index and the private Caixin manufacturing purchasing managers index both showed factory activity still expanding in May. And China’s services sector returned to growth last month for the first time since January: the Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 55.0 in May from 44.4 in April, hitting the highest level since late 2010. Readings above 50 indicate growth, below 50 indicate contraction. Improving economic data are bearish for gold prices.
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