Let us first look at the technical aspects of the chart for precious metals. Gold has developed a veritable double top formation as a result of developments in recent weeks. The February high at $ 1,689 and the March high at just under $ 1,700 are impressive over the price trend. This formation was already having a temporary effect when the gold price was pushed below the $ 1,565 / 1,550 zone, falling below its important 200-day line and only regaining ground under the $ 1,465 / 1,450 range.
Setback in gold price
The crisp setback in the gold price that was observed in mid-March may have been less fundamental than more practical. Obviously, liquidity had to be procured by market players in order to fill the holes that had been torn apart. While the stock markets were tumbling at the time, gold was still relatively stable. The “spook” was over relatively quickly for the gold price. The precious metal was then able to unleash a strong recovery, in the course of which he managed to overcome important hurdles. In this regard, the $ 1,565 / $ 1,550 range and $ 1,650 range should be identified. Governments and central banks are releasing immense liquidity in response to the corona pandemic. In addition, the US dollar is currently not as dominant on the foreign exchange market, which in turn benefits the gold price.