Gold steadily climbs back closer to multi-year tops on coronavirus jitters

Gold gained some follow-through traction on Friday and has now moved well within the striking distance of multi-year tops set on February 24.

Growing market concerns that the coronavirus outbreak has the potential to become a pandemic and rattle the global economy triggered a selloff across the global equity markets. This eventually forced investors to take refuge in the so-called "safe-haven" assets – including gold.

Gold boosted further by a combination of factors

Apart from the global flight to safety, firming market expectations that the Fed will have to cut interest rates by 50 bps for the second time on March 18 aggravated the plunge in the US Treasury bond yields and provided an additional boost to the non-yielding yellow metal.

Against the backdrop of collapsing US bond yields and Fed rate cut speculations, the US dollar extended its recent slump and remained under some heavy selling pressure on Friday. This eventually remained supportive of the bid tone surrounding the dollar-denominated commodity.

It, however, remains to be seen if the commodity is able to capitalize on the move or bulls opt to take some profits off the table ahead of Friday's key data risk, the release of the closely watched US monthly jobs report (NFP), due later during the early North-American session.

Technical levels to watch