· Gold prices rose to a two-week high on Tuesday, spurred by demand for safe-havens after iPhone maker Apple Inc’s revenue warning underscored the financial fallout of the coronavirus epidemic in China.
Spot gold was up 0.4% at $1,586.93 per ounce by 0717 GMT. Earlier in the session, prices touched their highest since Feb. 3 at $1,587.40.
U.S. gold futures inched up 0.2% to $1,590.
· “Asian-Pacific markets have opened broadly lower. Investors right now are very concerned about the economic impact of the coronavirus, also on business sentiment and consumer demand,” CMC Markets analyst Margaret Yang Yan said.
· Apple has cut revenue forecast for the March quarter on the disruption in China due to the virus and weaker demand from the Chinese market, leading to a risk-off sentiment in the market, she said.
Apple is one of the largest Western firms to be hurt by the epidemic.
It said manufacturing facilities in China that produce iPhone and other electronics have begun to reopen, but they are ramping up more slowly than expected. That pushed U.S. stocks futures as well as Asian shares lower.
· The death toll from the virus in mainland China rose by 98, even as its spread slowed with the number of new cases falling below 2,000 as of Monday. However, global experts warned it was too early to say the outbreak is being contained.
Meanwhile, China continued its effort to ease the drag to the businesses, with its central bank cutting the interest rate on its medium-term lending on Monday.
· On the technical front, “gold sits only 10 dollars or so away from major resistance in the $1,595/1,600 an ounce region. A daily close above this area would be a strong technical signal that further gains lie ahead,” Jeffrey Halley, senior market analyst at OANDA, said in a note.
· The U.S. dollar, also considered a safe-haven asset during times of economical and political uncertainties, rose to an over four-month high against key rivals.
“Dollar and gold are negatively correlated, but at this moment even though dollar is moving higher, gold is moving higher and that means the demand for safety is outweighing the currency impact on gold,” CMC’s Yan said.
· Elsewhere, palladium was flat at $2,522.79 an ounce after hitting a near one-month peak of $2,538.25 earlier in the session.
· Silver advanced 0.6% to $17.86, while platinum was up 0.5% to $973.49.
· Gold: Bulls dominate beyond $1585 as coronavirus-led risk-off continues
Gold prices remain 0.33% positive to stay mildly above $1586 during early Tuesday. The yellow failed to extend the previous day’s declines as the market’s fear wider than a registered outbreak of China’s coronavirus. Concerns about the deadly epidemic have also been raised by the key global institutions off-late.
Technical Analysis
Gold prices are all set to challenge the monthly top surrounding $1,594 while also targeting $1,600 round-figure. However, a downside break of a two-week-old rising support line, at $1,573 could trigger fresh pullback towards the sub-$1,550 area.
· Gold bulls eye critical resistance after coronavirus hits Apple – Confluence Detector
Gold is on the rise as the coronavirus outbreak has taken its toll on Apple, which warned that it will be unable to meet its guidance due to iPhone production issues. The safe-haven shiny metal is on the rise. How is XAU/USD positioned on the charts
The Technical Confluences Indicator is showing that gold faces a relatively weak cluster of lines at $1,587, which includes the Bollinger Band 15min-Middle, the Simple Moving Average 5-1h, the SMA 10-15m, the previous hourly high, the BB 4h-Upper, the Fibonacci 161.8% one-day, and the previous 4h-high.
Critical resistance is at $1,590, which is where the BB one-day Upper and the Fibonacci 23.6% one-month converge.
Looking down, some support awaits at $1,584, which is the confluence of the SMA 50-15m, the previous weekly low, and the SMA 10-1h.
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