Gold keeps clam below $1,600, await fresh clues to extend three-day losing streak
- Gold bears seem to catch a breath.
- Coronavirus woes continue to hurt the global trade sentiment.
- The US conducts airstrikes over Iranian camps in Iraq.
Having flashed the five-week low on Thursday, Gold bears seem to catch a breath while taking rounds to $1,578/80 as the Tokyo opens for trading on Friday. The yellow failed to cheer the broad risk-off as global traders lose confidence in safe-havens amid broad-based selling pressure.
Not only the stimulus from the US, Australia and the UK but monetary policy actions from the New York Fed, ECB and BOC also failed to put a bid on the bullion. The reason could be traced from the market’s lack of confidence in any assets as the risk-safe considering the major drawdown everywhere.
Coronavirus woes continue with the latest sign suggesting over 100,000 cases in the Ohio State and emergency in New York. Also in the headlines were the Spanish and Italian regulators that banned short-selling of some stocks whereas the open outcry at the CME is also stopped due to the pandemic. Additionally, the US Senate fails to pass President Donald Trump’s coronavirus relief bill, which in turn delays it until the next week if no additional measures are taken. Furthermore, the US conducted retaliatory strikes in Iraq after the attack that killed two US and one UK citizen.
On the positive side, New Zealand PM Jacinda Ardern bucks the trend of banning the mass community gathering. Moving on, Canadian Finance Minister signaled to go ahead with his plan to present the budget on March 30 despite the coronavirus concerns.
Amid all these plays, Firth warns of further damages to the structured finance whereas Japan’s Ministry of Finance indicates the need to hold BOJ meeting.
While portraying the risk-tone, global equities slumped to multi-year lows with the US DJI30 marking the largest losses since 1987.
Looking forward, investors may continue to pay higher attention to the virus headlines compared to the data, which are scheduled from the US. Relating to which, Westpac said, “The global data calendar is low key. In the US, the big release of the day is the March University of Michigan consumer sentiment index. This is expected to contract sharply to 95.0 as the COVID-19 outbreak becomes increasingly visible to households across the nation.”
Technical Analysis
50-day and 21-day SMAs, respectively near $1,589 and $1,624, can question the bullion’s short-term bounce whereas 100-day SMA close to $1,536 can lure the bears during further downside.
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.
