Gold hits fresh multi-year tops, bulls remain in control amid coronavirus fears

Gold continued scaling higher through the early European session on Friday and jumped to fresh seven-year tops, around the $1635 region in the last hour.

The latest warning by the World Health Organization warned that a global outbreak of the deadly coronavirus could happen at any time further fueled pessimism about the global growth outlook.

The bullish run remains uninterrupted

Adding to the concerns was the rise in the number of newly infected cases outside mainland China – South Korea and Japan. This weighed heavily on investors' sentiment and triggered a fresh wave of risk-aversion trade.

The same was evident from a sea of red across global equity markets, which eventually provided a strong boost to traditional safe-haven assets and assisted the precious metal to add to its recent strong gains.

The global flight to safety was further reinforced by a sharp fall in the US Treasury bond yields, which provided an additional boost to the non-yielding metal and contributed to the prevailing bullish tone.

Meanwhile, a subdued US dollar price action, which tends to influence demand for the dollar-denominated commodity, did little to hinder the ongoing momentum to the highest level since February 2013.

Given this week's strong rally of around 3.5%, extremely overbought conditions might turn out to be the only factor that might keep a lid on any further gains, or prompt some profit-taking on the last day of the week.

Technical levels to watch