Gold Price Analysis: Bears testing $1500 support, down over 1%
- Risk-off returns, gold sold in need for cash amid coronavirus chaos.
- US dollar stalls its broad corrective slide, funding stress back?
- Broad market sell-off amid coronavirus to keep the upside in check.
Gold (futures on Comex) extends the Asian descent into Europe, as the bears test the 1500 demand area amid a fresh risk-aversion wave hitting the markets.
The yellow-metal stalled its overnight bounce just shy of the 1550 mark and resumed its recent bearish momentum, as the sentiment turned sour amid a rising number of coronavirus cases globally.
Meanwhile escalating concerns over the economic impact of the pandemic also dampened the investors' sentiment, as they liquidated their positions in gold once again in exchange for cash so as to cover the losses incurred from the global equities sell-off.
Further, the US dollar stalled its corrective slide across its main competitors, which also collaborates with the latest leg down in gold. The US dollar index hit a fresh one-month high at 99.82 on Tuesday, as the demand for the most liquid currency shot up in times of the coronavirus chaos. The spot now trades at 99.33, having bounced-off a daily low of 99.16.
Despite the global economic stimulus measures deployed, the gold bulls failed to find any reprieve, as liquidity crunch continues to underpin the greenback and keep the yellow metal pressured. Focus remains on the USD dynamics and risk trends amid incoming virus headlines for fresh directives.
Gold technical levels to watch
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
