- Gold extends its corrective slide into the third day
- Rebound in the US dollar and Treasury yields likely weigh.
- Coronavirus fears-led risk-off fails to support gold bulls.
Despite the recovery attempts, gold (futures on Comex) remains heavy below $1650, having tested the key support around $1640 region in the last hour.
The prices consolidate the steep declines, as the bulls seem to have found some support from the World Health Organization (WHO) Chief Tedros’s comments. Tedros finally declared the fatal respiratory illness as a pandemic, as the outbreak tightens its grip across the US and Europe. Over 117k people have been infected globally by the virus.
The safe-haven gold ignores the risk-aversion seen across the global equity markets amid growing concerns over the rapidly spreading coronavirus globally. Meanwhile, a lack of concrete economic stimulus package from the US to battle the outbreak also failed to impress the gold bulls.
The main driver behind the almost $30 drop in gold prices from the European session’s high of $1671.45 to the recent daily lows of 1642.75 is the solid rebound staged by the US Treasury yields that has eventually lifted the greenback broadly higher. The US benchmark 10-year Treasury yields jump nearly 8% to regain the 0.80% level while the US dollar index hit a fresh three-day high of 96.61, up 0.15% so far.
Further, adding to the negative sentiment around gold, holdings in the world’s largest gold-backed exchange-traded fund (ETF), SPDR Gold Trust, slipped 0.2% to 962.03 tonnes on Tuesday. Meanwhile, investors continue to lock in gains in the precious metal after the surge to the highest levels in seven years on Monday.
Markets look forward to the US House coronavirus relief bill and the European Central Bank’s (ECB) monetary policy outcome for near-term trading impetus while coronavirus-related sentiment will continue to play a pivotal role.
Gold technical levels to watch
|Today last price||1646.30|
|Today Daily Change||-2.93|
|Today Daily Change %||-0.18|
|Today daily open||1649.23|
|Previous Daily High||1680.76|
|Previous Daily Low||1641.98|
|Previous Weekly High||1692.34|
|Previous Weekly Low||1575.58|
|Previous Monthly High||1689.4|
|Previous Monthly Low||1547.56|
|Daily Fibonacci 38.2%||1656.79|
|Daily Fibonacci 61.8%||1665.95|
|Daily Pivot Point S1||1633.89|
|Daily Pivot Point S2||1618.54|
|Daily Pivot Point S3||1595.11|
|Daily Pivot Point R1||1672.67|
|Daily Pivot Point R2||1696.1|
|Daily Pivot Point R3||1711.45|
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.