Gold: Awaits fresh clues to revisit $1,700
|- Gold remains on the front foot, benefit from the risk-off, US dollar weakness.
- Pessimism surrounding the coronavirus, downbeat US data and Fed Chair Powell’s comments propel the bullion.
- Good Friday holiday limit the moves, US data can offer intermediate direction.
With the coronavirus crisis weighs the market’s risk, Gold remains on the bulls’ radar while taking rounds to $1,685 last. Also supporting the yellow metal’s buying could be the weak US dollar despite the Fed’s action.
The US Centers for Disease Control and Prevention (CDC) on Thursday reported 427,460 cases of coronavirus, an increase of 32,449 cases from its previous count, and said the number of deaths had risen by 1,942 to 14,696, per Reuters. It should also be noted that the CDC earlier announced ‘no sail’ order to all cruise ships.
As a result, the US remains the world’s second-worst affected nation due to the virus after Italy.
The pandemic is likely to weigh on the economic performance and has already started signaling downbeat data, the US Jobless Claims and Michigan Consumer Confidence were the latest. Also portraying the economic toll were inflation numbers from China and Japan.
To fight against the deadly disease, the US policymakers have already agreed on $2.3 trillion worth of economic package while some more relief is likely on the cards. On Thursday, the Fed offered relief for mid-sized businesses as a part of the stimulus.
While Good Friday holiday could restrict market’s moves, the US Consumer Price Index (CPI) for March, expected 1.6% versus 2.3% prior on YoY, as well as CPI ex Food & Energy, forecast to drop to 2.3% from 2.4%, will be the key to watch.
Technical analysis
An area including highs marked during late-February and early-March, around $1,690/93, will be the first one to challenge the bulls. Following that, an upward sloping trend line from March 13, currently at $1,700, will be crucial. On the downside, the weekly low surrounding $1,641 acts as the immediate support ahead of $1,600 and 21-day SMA close to $1,591.
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