Gold: Positive above $1,570 as China’s coronavirus heavies risk-tone

Gold prices register four-day winning streak.
Despite a modestly weak increase in case numbers, Hubei data disappoints.
Coronavirus updates, China data will offer short-term directions.

Anil Panchal FXStreet

Gold prices remain on the front foot around $1,573 during Monday’s Asian session. In doing so, the yellow metal rises for the fourth consecutive day while also challenging the highest levels since last Tuesday. China’s coronavirus has been the key risk driver off-late. Even so, the broad US dollar rally questions the bullion buyers.

All eyes on Coronavirus…

Be it policymakers from RBA and Japan or the Fed’s semi-annual report, not to forget global producers, everyone now expects China’s epidemic to have a serious negative impact on the macros.

The latest numbers from China suggest the death toll crossed 900 mark whereas the numbers of people infected rallied beyond 40,000 mark. During the late-last week, the contagion crossed SARS that threatened trade sentiment in 2002/03 by crossing 774 mark.

Even if the latest pattern of numbers has been showing exhaustion, cases from Hubei, the epicenter of the deadly disease, continues to climb. “The capital city of the (Hubei) province (Wuhan) reported 14,982 cases as of Sunday, with the death rate hitting 4.06 percent,” says China’s Global Times.

While portraying the risk-off, the US 10-year treasury yields extend Friday’s losses to 1.56% whereas the S&P 500 Futures also drop 0.30% to 3,315 by the press time.

US dollar gains cap the rally…

While overall risk aversion should ideally fuel the precious metals, the US dollar’s inverse correlation with the commodities caps the upside. The US dollar index (DXY) rose to the strongest since October 11 on Friday after the US January month employment data continue portraying a strong picture of the world’s largest economy.

Looking forward, China’s January month Consumer Price Index (CPI) and Producer Price Index (PPI) will be gaining immediate market attention while the updates concerning coronavirus will be the key to watch. Although China’s Lunar New Year holidays might dilute inflation numbers, traders will be more interested in observing the contagion’s impact on the Chinese price pressure.

Technical Analysis

Sustained trading beyond 10-day SMA, near $1,570 now, pushes the yellow metal towards the monthly resistance line, currently at $1,589.

Additional important levels

Overview
Today last price	1573.5
Today Daily Change	3.37
Today Daily Change %	0.21
Today daily open	1570.13

Trends
Daily SMA20	1564.68
Daily SMA50	1526.34
Daily SMA100	1506.11
Daily SMA200	1459.12

Levels
Previous Daily High	1574.14
Previous Daily Low	1560.5
Previous Weekly High	1594.01
Previous Weekly Low	1547.56
Previous Monthly High	1611.53
Previous Monthly Low	1517.1
Daily Fibonacci 38.2%	1568.93
Daily Fibonacci 61.8%	1565.71
Daily Pivot Point S1	1562.37
Daily Pivot Point S2	1554.62
Daily Pivot Point S3	1548.73
Daily Pivot Point R1	1576.01
Daily Pivot Point R2	1581.9
Daily Pivot Point R3	1589.65

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.

GBP/USD breaches below 1.3500, two-day lows

GBP/USD faces renewed selling pressure, eroding the earlier advance and slipping back to the sub-1.3500 region on Wednesday. Cable’s loss of upside momentum follows the resurgence of the demand for the Greenback amid steady geopolitical tensions. Looking ahead, the British Pound is expected to remain under scrutiny in light of the release of UK GDP data on Thursday.

EUR/USD weakens to multi-day lows near 1.1520

EUR/USD makes a U-turn and trades with decent losses near 1.1520 following the closing bell on Wall Street on Wednesday. The US Dollar’s recovery post-US CPI data keeps the risk complex under pressure in a context where geopolitics takes centre stage once again. Moving forward, attention remains on US inflation with the release of Producer Prices alongside weekly Claims.

Gold clings to 100-day SMA, with upside risks intact

Gold is reverting to the $4,400 level in Asia on Thursday after facing rejection at $4,450 or fresh ten-week highs earlier in the session. Attention now turns to the US Producer Price Index data for more signs of cooling inflation, particularly after a mild US Consumer Price Index report.

Bitcoin faces thin liquidity and missing demand amid seller stress — Glassnode

Bitcoin (BTC) is showing signs of growing market exhaustion, with weakening liquidity and subdued demand leaving the market vulnerable to a sharp move, according to a Glassnode report on Wednesday. The firm stated that Bitcoin is trading between two important cost-basis levels as market activity has fallen to its lowest point since 2019.

UK GDP expected to show moderate Q2 growth

The United Kingdom’s Office for National Statistics will release the preliminary estimate of the second-quarter Gross Domestic Product on Thursday. Market analysts anticipate a 0.4% growth in the three months to June, after a modest 0.6% advance in the first quarter of 2026. Annual progress is expected at 1.1%, up from the 0.9% posted in March.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.