Gold has plunged in the short term and now is trading around the $1,700 psychological level, the outlook remains bullish as long as the price stays above this downside obstacle. The selling pressure is high in the short term, but the major uptrend is unharmed, so the yellow metal could increase anytime again.

Today's ECB meeting could boost the gold price again if further stimulus measures will be added to fight the COVID-19 crisis, the Main Refinancing Rate is expected to remain unchanged at 0.00%, but the Monetary Policy Statement and the ECB Press Conference will bring high volatility.

As you already know from my yesterday's analysis, the gold price was rejected by the upper median line (UML) of the minor dark blue descending pitchfork, so the current drop towards the $1,700 was somehow expected in the short term.

Gold has registered another false breakdown below the $1,700 level and below the $1,693 former low, but we still need another confirmation that the price will stay in the buyer's territory and that it could rebound soon.

The yellow metal has failed once again to reach the median line (ML) of the descending pitchfork, signaling that the bulls are still in the game. Another rejection or false breakdown with great separation below $1,700 - $1,693 area will suggest another bullish momentum towards the upper median line (UML) of the descending pitchfork.

• GOLD Recommendations

The gold price is trading near a critical zone, a valid breakdown below the $1,700 - $1,693 area will signal a further downside movement. If the price reaches the median line (ML) and if it closes on it, Gold could make a valid breakdown below the $1,666 major static support as well and to confirm a broader drop towards the $1,600, $1,555 levels and lower towards the $1,484 support level.

Still, the failure to close below the $1,693 level could send the rate higher towards the upper median line (UML) of the descending pitchfork. Only a valid breakout above the upper median line (UML) will really confirm a strong upside movement. Technically, if the price fails to reach the median line (ML) and if it makes a valid breakout above the upper median line (UML), most likely it will approach and reach at least the $1,765 high. The $1,800 level is seen as a potential target as well.