Gold Price Analysis: Yellow metal hits record high in Euro terms
- Gold hits record high in EUR terms, surges 10% on a year-to-date basis.
- Daily chart RSI has violated the bearish divergence.
A combination of gold price rally in the US dollar terms and a sell-off in EUR/USD has pushed the yellow metal to record highs in the single currency terms.
XAU/EUR or gold in EUR terms is currently trading at 1,490 per Oz, having hit a lifetime high of 1,494 during the overnight trade.
Gold rose to a fresh seven-year high of $1,613 earlier today, taking the cumulative year-to-date gains to over 5%. Notably, prices have risen by more than 4 percent from $1,547 to above $1,600 over the last two weeks on coronavirus fears and the resulting haven demand.
Meanwhile, EUR/USD fell to multi-year lows below 1.08 on Wednesday, having topped out at 1.1240 at the end of December.
As a result, XAU/EUR has gained more than 10 percent so far this year. The daily chart relative strength index (RSI) is reporting overbought conditions with an above-70 print. The price chart, however, is showing no signs of buyer exhaustion. The rally, therefore, could continue.
In fact, the RSI has risen past a descending trendline, invalidating the bearish divergence confirmed at the end of January. A failed bearish divergence is a powerful bullish signal.
Daily chart
-637177634645623503.png)
Trend: Bullish