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.

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

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD trying to set an interim bottom

EUR/USD has been consolidating around 1.0800 for a second consecutive day, ignoring risk-off and broad dollar’s demand. The case for a corrective advance becomes stronger.

EUR/USD News

USD/JPY stabilizes around 112.00 fresh 2020 highs

The USD/JPY pair has finally stalled at 112.22 but holds on to most of its latest gains. Buyers defending the downside in the 111.60/70 price zone.

USD/JPY News

AUD/USD at an over one-decade low near 0.6600

An uptick in the Australian unemployment rate, moving further away from RBA’s desired 4.5% level took its toll on the Aussie, also pressured by ruling risk-off.

AUD/USD News

Gold jumps to the highest level since February 2013, around $1620 area

Gold reversed an early dip to the $1604 area and jumped to fresh multi-year tops during the mid-European session on Thursday.

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex MAJORS

Cryptocurrencies

Signatures