Chart of the Day XAU/USD Fx

As a result of the selloff seen yesterday across the global indices on renewed concerns about the coronavirus pandemic, we saw a flight to the U.S. Dollar as a haven asset. In the early hours of the European session, the major global indices rallied by at least 1%. However, based on yesterday’s reaction and flight to safety, the expectation is to see gold rally. Across multiple time frames, the price is above the key moving averages. It is important to note that gold has been in a range with the lows at 1694 and the highs at 1746. Therefore, the decision to go long gold means buying towards the top of the range and skewing our risk to reward. However, the probability of achieving 1740 which is our profit target with an entry at 1732.91 and a stop loss at 1715 is much higher. Furthermore, based on the economic data that was released this morning for the U.K. economy, all GDP and manufacturing production figures came out worse than expected as well as the struggles facing the U.K about Brexit. Hence, when we factor all these into our analysis at least in the short term, we should see a gold rally.