Gold fails to keep it above $1,700 as bulls catch a breath
- Gold drops from a multi-month high.
- No positive change in the coronavirus headlines.
- Japan PM, US President expected to showcase, unveil measures.
- The collapse in oil prices exerts downside pressure on the global policymakers.
Following its run-up to the highest since December 2012, Gold prices drop to $1,662.80, down 0.73%, ahead of the European open on Monday. The yellow metal’s early-day run-up could be attributed to the week-start risk-off whereas the latest declines might have taken clues from the global policymakers’ readiness to counter the coronavirus (COVID-19).
A complete blockage in Lombardy and the rising death toll in Italy, coupled with the news from Saudi Arabia and Russia, triggered the early-Asian risk-off moves. The momentum propelled the yellow metal towards a multi-month top piercing $1,700, high of $1,703.40.
Though, news of the policymakers’ efforts from Australia, the US, Japan and the New Zealand seems to have activated the recent pullback in the bullion.
While portraying this, the US 10-year treasury yields recover from the record low of 0.47%, flashed during the early-day, to 0.528% by the press time. Additional recovery could also be witnessed in Asian stocks that are retracing from the initial loss of more than 4.0% to sub-3.0% in most cases.
With the COVID-19 headlines in the stoplight, investors will hardly move anywhere else to search for near-term direction. Should global efforts manage to find a cure for the deadly disease, the latest pullback could result in full-fledged risk-recovery.
Technical Analysis
Friday’s Doji seems to drag the quote towards $1,625, ahead of highlighting $1,611 support. However, an upside break of a rising trend line from January 08, at $1,713 could challenge $1,720 during the further advances.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
