Gold consolidates gains above $1,700, nears seven-year high

Gold prices witness a retracement from the seven-year high to $1,726 during the Asian session on Wednesday. While the upbeat comments from the US President Donald Trump might have been the reason for the bullion’s latest pullback, broad US dollar weakness and the coronavirus (COVID-19) pandemic could be considered as positive to the precious metal.

In his daily Coronavirus Task Force Briefings, US President Trump cited hopes for an early restart to some of the states while also expecting record run-up in stocks soon.

Even so, the market’s risk-tone remains mostly clueless with the US 10-year treasury yields taking rounds to 0.75% whereas stock futures flashing near 0.50% losses by the press time.

The International Monetary Fund (IMF) published its global growth outlook on Tuesday. The key institute now anticipates -3.0% growth figures, actual a contraction, for 2020 while also anticipating recovery during 2021.

On the other hand, the deadly virus has so far infected nearly two million people in the world while taking lives of more than 150,000 by the end of Tuesday. Although the UK and the US policymakers expect the cases to peak in the next few weeks, extended lockdowns in some of the economies keep the rush to risk-safety in action.

While virus updates are the key to near-term trade direction, an active US economic calendar can entertain the market players during the later part of the day. Among them, March month Retail Sales and Industrial Production, coupled with the NY Empire State Manufacturing Index for April, may gain major attention.

Technical analysis

Unless providing a daily closing below $1,700 mark, gold prices are en-route to October 2012 high surrounding $1,796/97.