- Gold struggles to justify safe-haven status amid greenback strength.
- Trump pushes for phased economic re-start despite extended lockdown in New York, rising virus fatalities.
- US data continues to spread disappointment.
- China’s GDP in the spotlight, for now, coronavirus headlines are also the key.
Gold prices step back from $1,720 to currently around $1,717after the bounce from $1,708 failed to last long. The bullion enters Friday’s Asian session with sober market mood amid the coronavirus (COVID-19) crisis and the broad US dollar strength. Though, the latest news concerning Gilead tests is likely a promising event amid the current pessimism.
“A Chicago hospital treating severe COVID-19 patients with Gilead Sciences’ antiviral medicine remdesivir in a closely watched clinical trial is seeing rapid recoveries in fever and respiratory symptoms, with nearly all patients discharged in less than a week, STAT has learned,” said CNBC recently.
While the news managed to propel S&P500 ETF, the broad market mood remains sober following the previous downbeat news/data.
US President Donald Trump holds the previous bias that the country has “passed the peak”, as far as the virus pandemic is concerned, while staying ready to announce a phased economic re-open. The Republican leader also pays a little heed to New York’s extended lockdown.
Further, Japan called for a national emergency whereas Switzerland bucked the trend and showed signs of exiting the restrictions.
On the data front, April month Philadelphia Fed Manufacturing Index slumped to the four-decade low whereas Initial Jobless Claims marked another figure above 5.0 million, to 5.2 million, making the four-week sum crossing 22 million.
At the end of Thursday’s US session, Wall Street remains mildly positive, due to the gains at the end, whereas the US 10-year Treasury yields dropped two basis points (bps) to 0.617%.
Although the market seeks solace in the USD, the risk aversion might take a halt amid a lack of major data ahead of China’s first quarter (Q1) GDP and March month Industrial Production, Retail Sales. While the GDP is likely to drop 9.9% QoQ, more than 7% expected decline in Industrial Production and a 10% slump in Retail Sales could also offer additional strength to the risk-off. Though China has been offering surprises off-late and any such outcome could dent the bullion prices further.
Technical analysis
While fresh buying is likely to take place above $1,730, sellers aren’t prepared for entry unless the quote slips below the 12-day-old support line, currently around $1,704.
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