Gold: Firm around two-week top beyond $1580 as risk-off continues
|- Gold remains modestly positive amid broad risk aversion.
- China’s coronavirus, fears of hard Brexit keep the risk-off intact.
- The US market’s off, a lack of major data could confine the moves.
Gold prices stay mildly positive, +0.08%, to $1,583.84 during the early Asian session on Monday. The yellow metal remains on the front foot amid the market’s fears emanating from China’s coronavirus. The latest Brexit-negative headlines also contribute to the risk aversion.
China tries it all to tame coronavirus implications…
Be it more than 300 billion Chinese yuan liquidity infusion or announcing corporate tax cuts and an increase in fiscal spending, the diplomats in China are trying from all corners to placate markets. However, they have been less successful so far.
The latest action comes from the General Administration of Customs (GAC) that speeded up inspection of imported manufacturing equipment and simplifying the quarantine approval procedures for foreign medical goods.
Even so, the increasing toll of the coronavirus fears the markets. The total number of infected people from the deadly disease crossed 68,500, with a death toll rising to 1,665, on February 15.
As a result, the US 10-year treasury yield and the German bunds remain on the back foot. However, global equities seem to portray the mixed signs amid upbeat signals from the US.
Brexit also contributed to the risk aversion…
In addition to the Chinese epidemic, fears of a no-deal Brexit also contribute their part to the markets’ risk aversion. With the Tories at the helm, the European Union (EU) leaders aren’t finding themselves in a comfortable position while heading into the Brexit trade deal talks up for early March.
The recent headlines from The Telegraph and The Guardian suggest that there will be a tough start to the talks considering the differences between the two ex-neighbors.
Although risk aversion will keep the yellow metal on the bulls’ radars, an absence of the US traders could give rise to a dull trading session. However, the preliminary reading of Japan’s fourth quarter (Q4) GDP, expected -0.9% versus +0.4% prior, can offer immediate direction to the bullion.
Technical Analysis
A downward sloping trend line since January 08, around $1,585 now, can restrict the precious metal’s near-term upside. However, an eight-day-old rising trend line, currently at $1,570, could challenge intra-day sellers.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.