April 9th, 2020 XAUUSD Market Analysis.

Gold, the global store of value during economic recessions and global economic meltdowns behaved in ways many people never anticipated. During economic down times, the general expectations are that the value gold and other safe haven assets would rise in value.

During the month of January and February 2020 however, the economic challenges of the world was at a scale beyond what many had envisaged. Indeed the corona virus caused global trade to halt, as countries shut down their bothers, the drain on banks and other wealth management organisations was so huge.

Global Gold Charts

In investments, timing is everything and this time, global banks were selling gold not because they want to, but because they have to. They had to sell gold and other safe haven assets to meet their liquidity challenges. This however caused the price of gold to fluctuate, ending both February and March in the red.

From the traders perspective, as evident by the chart, gold has reached a key support point, one we expect it to break for further upward pressure. As traders, these are our expectations, unfortunately, the market has a language on its own. Thus, should a rejection occur at the resistance zone, we would have no choice to sell a bit into the downward pressure in the short term, while equally hedging towards a stronger gold in the long term.

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