Gold Test’s Double Bottom Amid Risk On Sentiment – Brace for Next Trade!
Arslan Butt • 1 min read
The safe-haven-metal prices dropped mainly due to risk sentiment improved in the wake of coronavirus developments. GOLD Futures for April delivery on New York’s fell 0.2% to $1,559.75 per ounce. The yellow metal earlier fell to $1,551.25, its lowest level since January 22.
The decline in yellow-metal prices came due to the Chinese newspaper reported that a team of researchers had found that drugs Abidol and Darunavir can inhibit the new virus in China.
At the coronavirus front, the latest headline came that the total confirmed cases of the coronavirus infected people from Hubei, the epicenter of the epidemic, has risen to 19,665 by the end of February 05. It was also mentioned that the total death losses rose to 549 with the latest addition of 70 people. As well as, China’s total of confirmed coronavirus cases increased to 28,018, with the number of people died due to the contagion rising to 563.
It should be noted that the risky assets traded bullish today in the opposite direction of the safe-haven gold. Meanwhile, the US ten-year treasury yield also took a strong upward trajectory recently. The benchmark yield rose by more than six basis points on Wednesday and is currently trading at 1.65%.
Whereas, the yields and the dollar index could continue to gain altitude on Wednesday, in the wake of risk recovered. The futures on the S&P 500 are currently adding 0.27%, having risen by more than 1% on Wednesday.
Daily Support and Resistance
Pivot Point 1555.34
GOLD fell dramatically to test the support level of 1550, and now it’s likely to test the 50% retracement mark at 1,560, which may extend solid resistance to gold today. On the higher side, the resistance is likely to be 1,564, and the chances of bearish reversal can be seen below 1,564/65 level today.