Gold hits fresh multi-year tops, eyeing $1700 mark

Gold continues scaling higher amid a fresh wave of the global risk-aversion trade.
Heightened fears about the economic impact of the deadly coronavirus rattled investors.
Absent relevant economic data is unlikely to hinder the ongoing strong move up.

Haresh Menghani FXStreet

Gold held on to its strong gains through the early European session and climbed to fresh multi-year tops, around the $1685 region in the last hour.

Market concerns that the global economic growth could take a hit amid the outbreak of the deadly coronavirus were further fueled by reports of a sudden rise in the number of confirmed cases in the north of Italy.

Buying remains unabated

The weekend news rattled investors and triggered a fresh wave of the global risk-aversion trade on the first day of a new trading week, which eventually boosted demand for traditional safe-haven assets, including gold.

The flight to safety was evident from a sea of red across equity markets and reinforced by a slump in the US Treasury bond yields, which further played their part in driving flows towards the non-yielding yellow metal.

The precious metal added to its recent momentum and gained some strong follow-through traction for the fifth consecutive session on Monday – also marking its seventh day of a positive move in the previous eight.

Meanwhile, some renewed US dollar buying interest, which tends to undermine demand for the dollar-denominated commodity, did little to hinder the ongoing momentum to the highest level since January 2013.

With the coronavirus-led risk-off mood turning out to be an exclusive driver of the commodity's move up, bullish traders largely shrugged off extremely overbought conditions on short/medium-term charts.

Hence, an extension of the bullish trajectory, possibly towards reclaiming the $1700 round-figure mark, now looks a distinct possibility amid absent relevant market-moving economic releases from the US.

Technical levels to watch

XAU/USD

Overview
Today last price	1643.56
Today Daily Change	0.00
Today Daily Change %	0.00
Today daily open	1643.56

Trends
Daily SMA20	1582.32
Daily SMA50	1550.93
Daily SMA100	1515.19
Daily SMA200	1474.38

Levels
Previous Daily High	1649.32
Previous Daily Low	1619.02
Previous Weekly High	1649.32
Previous Weekly Low	1578.88
Previous Monthly High	1611.53
Previous Monthly Low	1517.1
Daily Fibonacci 38.2%	1637.75
Daily Fibonacci 61.8%	1630.59
Daily Pivot Point S1	1625.28
Daily Pivot Point S2	1607
Daily Pivot Point S3	1594.98
Daily Pivot Point R1	1655.58
Daily Pivot Point R2	1667.6
Daily Pivot Point R3	1685.88

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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