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· Gold prices slipped on Wednesday as the dollar firmed and comments from Chinese health officials soothed investor fears of a global pandemic.

Spot gold fell 0.4% to $1,551.90 per ounce by 0704 GMT. On Tuesday, prices declined as much as 1% to their lowest since Jan. 15 at $1,545.96.

U.S. gold futures were down 0.4% to $1,551.80.

· Asian stock markets bounced as China’s response helped ease concerns about the possible global fallout from the coronavirus outbreak, although worries about a hit to domestic demand and tourism remained.

· “Dollar is steady and there is apprehension that there will be less gold demand from China in the current year as well,” said Hareesh V, head of commodity research at Geojit Financial Services.

China’s gold consumption fell for the first time in three years in 2019, data showed on Tuesday, as high prices and an economic slowdown hit buying in the world’s biggest market for the metal.

· China will start celebrating the Lunar New Year, a key gold buying occasion in the region, from this weekend. However, investors are worried about the threat of contagion as hundreds of millions travel for the New Year holidays.

The death toll from the new flu-like coronavirus in China rose to nine on Wednesday with 440 confirmed cases, Chinese health officials said as authorities stepped up efforts to control the outbreak by discouraging public gatherings in Hubei province.

· The dollar firmed against a basket of currencies, making gold more expensive for holders of other currencies.

· “Gold is struggling to gain momentum as positive equity market sentiment builds,” Stephen Innes, chief market strategist at AxiCorp, said in a note.

“Hedge funds remain on the sidelines, and sovereign accounts that were active at the start of the year seem to be absent ... physical demand into the Chinese Lunar New Year is weak.”

· On the technical front, spot gold may revisit its Jan. 14 low of $1,535.63 per ounce, according to Reuters technical analyst Wang Tao.

· Gold Price Technical Analysis: Daily Chart

At present time, gold prices remain intertwined around their daily 5-, 8-, 13-, and 21-EMA envelope, which is in neither bearish nor bullish sequential order. A bearish engulfing bar appears to be forming on the daily candle (at the time this report was written), further evidence that recent gold price action is indicative of a near-term top. Daily MACD has issued a sell signal (albeit in bullish territory), while Slow Stochastics have fallen below the median line into bearish territory.

More corrective price action may be ahead for gold prices in the near-term.

· FX Street: Gold remains under pressure around $1,551 as US dollar keeps the gains

Gold bounces off the intra-day low of $1,550.40, flashed a few minutes back, to $1,551.30 by the press time of the pre-European session on Wednesday. In doing so, the safe-haven ignores the geopolitical risks emanating from China and the uncertainty surrounding the US-China trade relations. The reason could be found in the US dollar strength that has a negative correlation with the yellow metal.

Moving on, trade/political and update concerning the coronavirus will keep the global headlines equipped while the US second-tier data concerning housing and manufacturing can offer additional directives to the bullion traders.

Technical Analysis

The precious metal portrayed a bearish spinning top on Tuesday, which in turn favors its further declines to a 21-day SMA level of 1,542.55. Alternatively, a daily closing beyond Tuesday’s high near $1,569 will defy the bearish candlestick formation.

· Among other precious metals, palladium jumped 1.1% to $2,427.51 an ounce.

Silver shed 0.1% to $17.75 per ounce, while platinum edged higher by 0.1% to $999.91.