Today in the early Asian session, the yellow metal prices dropped despite the decline in the Chinese stock markets and the intensified fears of the coronavirus. The drop in the gold prices came even after China’s Shanghai Composite and the Shenzhen Component dropped more than 8% earlier in the day after the country’s National Health Commission confirmed the death toll from the new virus rose to above 400. Confirmed cases increased to above 20,000, it said.

Notably, the safe haven metal prices initially benefited due to the market’s risk-off sentiment in the wake of coronavirus outbreak fears. However, the recently released data from Japan and Australia, as well as the Chinese government’s measures to tame the sell-off after long holidays, seem to have sent the prices higher.

The fears of coronavirus outbreak have grown stronger during the weekend because the numbers of affected people and the death toll climb higher. Apart from the coronavirus, there is another virus that occurred in Hunan known as H5N1 bird flu virus. Most of the global economies have decided to cancel flights to China while the American Airlines’ group recently banned foreign nationals who have visited Beijing in the last 14 days.

Whereas, the People’s Bank of China (PBoC) has announced to provide 1.2 trillion yuan liquidity in order to support money markets and ease the sell-off while the securities’ regulator said to stop short-selling of stocks. Moreover, the authorities have also informed banks to continue to provide loans to those companies which are affected by the outbreak.

As a result, the risk of the deadly disease has previously dragged the US 10-year treasury yields and S&P 500 SPX futures. Although, the latest data from Japan and Australia might have helped questioned the bears.

Looking forward, traders will keep their eyes on Brexit headlines because the UK has formally left the EU and will now be on the discussion table for future trade relations. Additionally, the coronavirus headlines will also stay in the traders’ radars.

Daily Support and Resistance
S3 1545.72
S2 1564.89
S1 1577.33
Pivot Point 1584.07
R1 1596.51
R2 1603.24
R3 1622.42
GOLD again reversed to 1,572 area, and now it’s heading towards another support level of 1,569. Violation of this level can cause further drop until 1,563. From the stock market, it looks like the market is trading with a risk-on sentiment and may drive selling in gold today.