XAU/USD: Why Gold is Still a Strong Buy

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Analysis
- To begin with, we can start by looking at the technicals on Gold's weekly chart
- The first thing we can spot is the "U" shaped recovery trend that has been valid since 2011
- Ever since Gold bottomed out in 2016, it has been on a bullish rally
- The bullish trend has become increasingly steeper the past few months
- Based on price action history, we can identify four levels of key support: $1880, $1790, $1680, and $1565
- It's also important noting that prices have been trading above the Ichimoku cloud, which has been acting not only as bullish trend confirmation, but also as strong support
- We can see that Gold has broken out of the long term descending trend line resistance in the beginning of 2019
- After a slight pullback, it has been on a bullish rally ever since
- Based on the current techncials, a highly probable scenario is if Gold forms a cup and handle pattern to break out to new all time high levels
- A reasonable drop to significant support levels would be a 7.81% drop from current price levels.
- Gold's bullish movement is correlated to two fundamental changes within the economy: the Corona Virus (COVID-19), and the Dollar Index (DXY)
- Due to an unexpected global crisis taking place, Gold - traditional store of value - has become a popular investment among the general public looking to hedge
- Along with this crisis, the US government has been printing money out heavily, and with the increase in money supply, the Dollar Index has been showing a steep bearish trend as well

Conclusion
It's very likely that Gold will continue its bullish momentum until there is a clear solution suggested to the Coronavirus Pandemic. People will continue to insure their investments through a store of value, hedging with gold, and a sell off is only likely to continue once the US Dollar (USD) finds its ground.