The relative performance of precious yellow metal continues to sparkle brightly since the bullish outside range was confirmed, along with the $1,515 break and achieving its $1,555-65 objective.
Since then, spot gold prices have soared to an intraday high of $1,638 after the New York, or (Sydney’s opening).
As global markets wait for U.S. Congress to approve a more than $US2 trillion (A$3.4 trillion) economic rescue package, the Dow Jones Industrial Average post an explosive one-day gain of +2,112.98 points or +11.4%, its best daily percentage gain since March 1933 and fourth-best.
Meanwhile, since the break of $1,515, prices have notched up a whopping +8.12% rally.
Earlier in the week, the global markets were surprised after the U.S. Federal Reserve unleashed its own set of new and extensive measures to help keep corporate credit flows and other critical parts of financial markets functioning smoothly.
The U.S. Fed said it would purchase Treasuries and mortgage-backed securities “in the amounts needed to support smooth market functioning,” showing the central bank is willing to go far beyond the $700 billion in new purchases announced last week.
Meanwhile, the bears continue to weigh on the US Dollar index as it slips further away from the three-year highs of 103.83 after posting an intraday low overnight at 101.52.
Although the outlook is neutral due to the ADX “lack of trend” to support (the bullish sentiment), it is assessed swings of either side will remain vast due to the given high volatility, trading will continue to come at a “high risk” given to the uncertainty of the market conditions.
However, a break of $1,648 may provide another shot of adrenaline to the market and trigger the upside move to $1,700-15. Reassess from there, as beyond here proposes an extension to the region of $1,720 to $1,780-90 viewed as a near-term cap.
Note that the support is located from the $1,598-$1,611 area. Reassess from there, as the next location is viewed from $1,550-65.