· Gold rose on Thursday as a surge in the number of new coronavirus cases in China dashed hopes that the epidemic was slowing and drove investors to safe-haven assets.
Spot gold was up 0.4% to $1,571.70 per ounce as of 0312 GMT. U.S. gold futures gained 0.2% to $1,574.90.
· “The unfortunate increase in number of cases in the Hubei province, which is ground zero... has affected risk-on sentiment,” said John Sharma, an economist at National Australia Bank.
Hubei reported 242 new deaths and confirmed 14,840 new cases as of Wednesday, a dramatic rise from the 2,015 new cases a day earlier after China began using a new clinical method for diagnosis.
The fastest rise in the daily death count since the outbreak weighed on Asian equities, but lifted the safe-haven yen from a three-week low against the U.S. dollar.
However, gold’s rise was slow as the U.S. dollar was hovering close to a more than four-month high scaled against key rivals in the previous session.
“It is more of a situation of capping gold’s gain than having a major negative impact. With higher dollar index, the scope for gold to go much higher is limited,” NAB’s Sharma said.
· Amid slowing global economic growth, negative Treasury yields and easing monetary policy around the world, investors are now looking for any information regarding the economic impact of the coronavirus epidemic.
· Meanwhile, Federal Reserve Chair Jerome Powell on Wednesday reaffirmed his confidence in the U.S. economic outlook, but said he expected some drag “soon” from the virus.
· Gold Price Analysis: XAU/USD bulls eyeing $1570.00/oz and above
Gold is trading in a bull trend above the main daily simple moving averages (SMAs). The market is evolving in a rising channel while the price appears to be supported above the 1560.00 figure.
Gold four-hour chart
XAU/USD is trading above the 200 SMA while challenging the 50/100 SMAs on the four-hour chart. Bulls appear to be in control and a break above the 1567.50 resistance is likely to lead to gains towards the 1572.39, 1575.65 and 1580.00 price levels. Retracements down could find support near the 1562.62, 1557.73, 1553.00 and 1547.95 levels, according to the Technical Confluences Indicator.
Resistance: 1567.50, 1572.39, 1575.65, 1580.00
Support: 1562.62, 1557.73, 1553.00, 1547.95
· Gold Price Analysis: Levels to watch after coronavirus-fueled jump – Confluence Detector
Gold prices have turned higher after China reported a leap in coronavirus cases and after a methodology change. Investors are running to safety and the precious metal is eyeing higher levels.
The Technical Confluences Indicator is showing that Gold prices face resistance at around $1,576, which is a cluster of lines including the Fibonacci 38.2% one-month, the Fibonacci 161.8% one-day, the Bollinger Band 15min-Upper, the BB 4h-Upper, and the Fibonacci 61.8% one-week.
Further above, the yellow metal has room to run until $1,594, which is where the Pivot Point one-week Resistance 1 and the previous weekly high converge.
Support awaits at $1,571, which is the confluence of the Pivot Point one-day Resistance 1 and the previous daily higher.
The next cushion is also close. At $1,567, XAU/USD enjoys the convergence of the Fibonacci 61.8% one-day, the Simple Moving Average 50-4h, the BB one-day Middle, the SMA 200-1h, the SMA 10-4h, and the SMA 100-15m.
· Bullion counters were upbeat in Thursday’s session as traders rushed to safe havens after the number of new cases and deaths due to Coronavirus rose exponentially in China.
China's Hubei province, where the virus is believed to have originated, reported 242 new deaths, double the previous day's toll, and confirmed 14,840 new cases on February 12.
Globally too gold prices rose as a surge in the number of new coronavirus cases in China dashed hopes that the epidemic was slowing and drove investors to safe-haven assets. Spot gold was up 0.4 per cent to $1,571.70 per ounce, and hit high at $1575.35 in earlier session.
· Elsewhere, palladium fell 0.7% to $2,386.83 per ounce, silver rose 0.8% to $17.60, while platinum gained 0.2% to $963.14.
Reference: Reuters, FXstreet
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