FX.co ★ GOLD Price Action Suggests End Of Correction!

The gold price has erased some of the latest losses, the faked breakdown below the $1,900 level could invalidate a deeper drop. Gold has reached another low at $1,862 today, now is traded at $1,933, a major bullish engulfing pattern around $1,900 psychological level could signal the end of the massive drop.

The retreat was somehow expected after the amazing rally, but this could be only a temporary one because the COVID-19 crisis is far from being solved, the China and US tensions could escalate again, so it's hard to believe that the yellow metal will register a major drop.

Gold has increased aggressively in the last hours, so a reversal pattern here could announce that the bearish momentum is finished and that the rate could try to come back higher.

Closing and consolidation somewhere above $1,920 area, gold could develop another upside movement. I believe that only a valid breakdown below the $1,900 and another lower low, drop below $1,862 level will signal a broader drop towards $1,800 level and towards the $1,744 static support.

• GOLD Trading Tips

Sell a valid breakdown (close and retest) below $1,900 level, set your target somewhere at the $1,800 level.

Gold has rallied in the last hours, a bullish engulfing could bring another long opportunity. The S2 ($1,909), $1,900, and the upper median line (UML) retest will bring a buying opportunity. The Stop Loss should be placed below $1,862 former low.