Chart of the Day XAUUSD (Gold)

<h2><span>Chart of the Day XAUUSD (Gold)</span></h2>
<p><span>XAUUSD (Gold) momentum divergence to be addressed – Probable Price Path</span></p>
<p><span>Gold firmed on Wednesday buoyed by rising demand for safe-haven investments, as the extent of damage from the coronavirus became more apparent following bleak data from major economies and optimism about a potential vaccine fizzled out. Spot gold was up 0.2% at $1,747.82 per ounce by 0808 GMT. U.S. gold futures rose 0.4% to $1,752.40. “The so called ‘vaccine hope’ rally in equities has weakened. Gold is back in focus with bad economic releases… trade relations can take an ugly turn at any moment,” said Jigar Trivedi, commodities analyst at Anand Rathi Shares and Stock Brokers in Mumbai. The optimism from early data for a vaccine faltered after a medical news website reported it was insufficient, causing U.S. equities to fall and Asian stocks to be flat after rallying earlier this week. U.S. homebuilding dropped by the most on record in April and permits for future construction tumbled, leading to fears the pandemic would lead to the deepest economic contraction in the second quarter since the Great Depression.In Japan, business confidence collapsed in May, hitting decade lows as firms braced for a protracted period of economic weakness, the Reuters Tankan survey showed.Markets now await the Federal Open Market Committee’s April 28-29 policy meeting minutes at 1800 GMT.In testimony before the U.S. Senate Banking Committee, Federal Reserve Chairman Jerome Powell said the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.”What the Fed does in the next few months will be pretty important, and certainly Powell did indicate that the rates would remain near zero for foreseeable future,” ANZ analyst Daniel Hynes said. </span><span>Lower interest rates benefit the non-interest bearing gold.</span></p>
<p><img class="aligncenter size-full wp-image-43849" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-20-10.16.14.png" alt="" width="1630" height="1145" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-20-10.16.14.png 1630w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-20-10.16.14-300×211.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-20-10.16.14-1024×719.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-20-10.16.14-768×539.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-20-10.16.14-1536×1079.png 1536w" sizes="(max-width: 1630px) 100vw, 1630px" /></p>
<p><span>From a technical and trading perspective, XAUUSD has made a break from the prolonged consolidation and contracting range, however, price has stalled at the primary equality objective 1766 pretty much tto the tick. Of note is the significant momentum divergence that has been witnessed during this trade higher. Bearish exposure will likely be rewarded ona daily close below the near term volume weighted average price currently 1737, expect some initial support back to the big figure 1700 but as any bounce here fails to make new highs then bears can look for a test of symmetry swing support back to 1525 as weak hands get shaken out of crowded long positions. A close above 1770 would negate the bearish thesis opening a move to test 1800.</span></p>
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