Gold building a bullish case as COVID-19 reigns

COVID-19 continues to spread, lockdown tensions support bullish case for gold.
US stocks fall off a cliff for worst start to a quarter on record.

Ross J Burland FXStreet

Gold is currently trading at $1,592.00, +0.22% on the day and travelling between a low of $1,587.84 and a high of $1,596.20 on a spot basis, albeit following a negative close in futures overnight for a fourth straight session loss despite the risks of COVID-19's spread.

The gold price has lost some bullish support of late as the US dollar moves higher, ending the last quarter on the front foot as a relatively illiquid market sees exaggerated moves adding to the upside support.

Gold bulls lining up

"The improvement in USD liquidity should help remove some left tail risk, while the extraordinary QE package, combined with large government stimulus packages reek of MMT, which should eventually send real rates on a downward trajectory, particularly as global central banks will be willing to let inflation run hot as part of their symmetric targeting framework," analysts at TD Securities explained. "This should help cement a multi-year rally in the yellow metal."

Meanwhile, COVID-19 continues to spread and made for a dismal start for the quarter. More on that here, Wall Street Close: Bruising losses in US stocks resulting in the worst start to a quarter on record, whereby the Dow Jones Industrial Average ended around 974 points lower, down 4.4%, near 20,943 after dropping more than 23% for its biggest first-quarter decline on record.

Indeed, there has been high anxiety over the trajectory in COVID-19 cases and uncertainty, which markets loath, and the prospects of another sovereign debt crisis is one to watch for further upside in gold. Extended deadlines for lockdowns in various nations over the world reinforce the bullish narrative for the precious metal.

Gold levels

XAU/USD

Overview
Today last price	1592.94
Today Daily Change	15.05
Today Daily Change %	0.95
Today daily open	1577.89

Trends
Daily SMA20	1590.67
Daily SMA50	1590.32
Daily SMA100	1544.6
Daily SMA200	1511.08

Levels
Previous Daily High	1623.74
Previous Daily Low	1574.53
Previous Weekly High	1644.54
Previous Weekly Low	1482.74
Previous Monthly High	1703.27
Previous Monthly Low	1451.3
Daily Fibonacci 38.2%	1593.33
Daily Fibonacci 61.8%	1604.94
Daily Pivot Point S1	1560.37
Daily Pivot Point S2	1542.84
Daily Pivot Point S3	1511.16
Daily Pivot Point R1	1609.58
Daily Pivot Point R2	1641.26
Daily Pivot Point R3	1658.79

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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