Gold: Mildly positive below $1580 as risk aversion continues
- Gold prices hold onto recovery gains near the eight-day top.
- Risk-tone keeps dwindling amid coronavirus fears, political headlines and broadly strong US dollar.
- US data, headlines from China will be the keys to watch.
Gold remains firm around $1,578 during Friday’s Asian session. The extension of an increase in coronavirus cases seems to have favored the bullion’s latest run-up after cases shot the previous day on the change of diagnosing method.
As per the latest release from China’s Health Commission, the epicenter Hubei province reports 4,823 new cases on the second day of using the new method. The details suggest that the number of people in serious and critical condition rose to 9,638 from the prior readouts of 7,084.
While realizing the seriousness of the issue, Chinese officials are active enough to infuse financial markets while also not refraining to sack two key officials during the latest Politburo meeting. On Thursday, China’s President Xi Jinping suggested that the government’s efforts were beginning to have positive effects.
Elsewhere, the US Dollar stays firm around four-month high as upbeat data at home, as well as positive comments from the Fed officials, please the greenback buyers. It should be noted that the USD is noted to have a negative correlation with commodities.
On the political front, a rocket strike on the US military base in Iraq as well as the US Senate’s taming of President Donald Trump’s powers to go on a war with Iran offers a little direction to the precious metal.
That said, the US 10-year treasury yields decline two basis points to 1.60% whereas S&P 500 Futures trim 0.12% to 3,373 by the press time.
Moving on, investors will keep eyes on headlines from China and on the global geopolitics while the US Retail Sales and Michigan Consumer Sentiment Index could please the momentum traders afterward.
Technical Analysis
Considering the highs marked since February 04, buyers need to tackle $1,580 immediate upside barrier to aim for monthly top surrounding $1,594 and $1,600 round-figure. On the downside, 21-day SMA around $1,569 and the latest low near $1,562 should be watched during the pullback.