⚡Crypto Alert : Altcoins are up 28% in just last month! Unlock gains and start trading now - Click Here

Daily Brief, Feb 26: Risk Sentiment Rises, Things You Should Know About Gold

Posted Wednesday, February 26, 2020 by
Arslan Butt • 2 min read

Good morning, traders.

Today in the early Asian session, the safe haven metal prices dropped for the first time in 11 sessions on Tuesday and stopping its ten-day rally after the market risk sentiment found some stability.

GOLD settled down $26.60, or 1.6%, at $1,650 per ounce. Just on Monday, the benchmark hit a seven-year high of $1,651.85. Spot gold, which tracks live trades in bullion, was down $9.99, or 0.6%, at $1,650.43 by 3:30 PM ET (20:30 GMT). Bullion struck $1,689 in the previous session, its highest since January 2013.

Stocks dropped because the US Center for Disease Control and Prevention said a spread of Covid-19 in the US was sure and warned Americans to be ready for interruptions in their daily lives. As coronavirus spreads fast outside China, with new cases being reported in the US, Singapore, Germany, and several other European countries, investors are still careful due to looming risks to the global economic growth.

Recently, broad-based US dollar weakness due to a drop in the US Treasury yields and Wall Street indices also supported gold to regain some footing. Despite the virus fears, gold extended its correction from a seven-year peak of 1689.40 and reached as low as 1625, as markets resorted to profit-taking after Monday’s dramatic rise.

The stock market is also extending mixed sentiment for gold trading. Shares in Transportation (-4.38%), Banks (-4.38%) and Energy (-4.34%) sectors suffered the biggest losses. Credit-card firms American Express (-5.7%), Visa (-5.2%) and Mastercard (-6.7%) suffered heavy losses, Energy companies Cimarex Energy (-8.0%), Occidental Petroleum (-8.3%) and Noble Energy (-5.3%) hit 52-week lows. United Airlines shed 6.5% and Macy’s dropped 5.5%.

Looking forward, there won’t be any meaningful macroeconomic data releases on Wednesday, and markets will remain focused on coronavirus headlines.

Daily Support and Resistance

S1 1572.69

S2 1606.12

S3 1620.53

Pivot Point 1639.54

R1 1653.95

R2 1672.97

R3 1706.39

The yellow metal gold has traded bearish mode to fill the massive gap and has almost completed 50% Fibonacci retracement at 1,626 on the daily chart. So far, gold has traded in line with our previous forecast, and we need to stick to the same analysis. Bearish break out of the 1,626 level can extend gold prices towards 61.8% Fibo level 1,604 in the coming days. On the smaller timeframe, gold has entered into the oversold zone, and it may show us a slight bullish correction until 1,653 before showing more selling. Good luck!

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
Comments
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments