Search ForexCrunch
  • Gold defies the pullback from the monthly top.
  • The earlier receding fears of coronavirus failed to gain momentum following the latest data.
  • RBNZ, BOJ and the US policymakers keep suggesting further stimulus, virus headlines become important.
  • The US FOMC minutes will decorate the economic calendar.

With the market’s risk-tone witnessing fresh downside pressure, Gold prices recover to $1,650 amid the early Wednesday trading. While Monday’s coronavirus (COVID-19) data suggested receding fears of the deadly disease, the latest figures keep the risk-off alive. Also favoring the market’s rush for safety are signals for further stimulus from the US, Japan and New Zealand.

Tuesday’s all-time high in the UK and the Spanish death toll defied the early hopes that the pandemic is losing the grip in the global hot-spots. Also fueling the fears were data from New York and updates from Japan.

Furthermore, BOJ, RBNZ and the Trump administration officials stay ready for further stimulus.

On the contrary, Hubei’s repeated zero prints of the virus cases challenge the pessimists.

Even so, the US 10-year treasury yields pull back from the previous recovery while declining three basis points to 0.71%. Further, stocks in Asia are also mildly weak whereas the US stock futures remain downbeat following Wall Street closing.

Given the virus updates’ heavy influence on the markets, the bullion traders will keep following the COVID-19 clues for near-term direction. Additionally, the FOMC minutes for the early-March Fed meeting might also offer intermediate moves.

Technical analysis

Unless bouncing back beyond a four-week-old resistance trend line, currently near $1,675, buyers are less likely to enter. As a result, the immediate support line around $1,639 remains on the card for sellers.