Gold prices consolidate gains to $1,580 despite no change in risk catalysts
- Gold trades near three-week high following the recent rush to risk-safety.
- Fears of China’s coronavirus and the US-Iran tension act as major drivers off-late.
- The US data, headlines from China, the Arab world will be in focus.
Gold prices pull back from the three-week top to $1,581, -0.10%, amid Tuesday’s Asian session. That said, the bullion’s latest advances could be attributed to China’s coronavirus outbreak as well as a fresh tussle between the Middle East and the US. Even so, an absence of major catalysts during the early Asian session seems to weaken the quote off-late.
The rise in the confirmed case of coronavirus infected personal in China’s Shanghai and Henan followed the first German incident that grabbed global attention. The US, Japan and Sydney already registered multiple such cases and have contributed their part to spread fears of an epidemic.
On the other hand, the US is considering Iran’s satellite test as a challenge and threatens to join France in making Tehran behave like normal countries. This is despite the Iraqi government’s efforts to placate the Trump administration which hates repeated attacks on their troops in Iraq.
While portraying the risk-off, the US 10-year treasury yields dropped to the lowest since early October on Monday whereas major Wall Street benchmarks registered losses in excess of 1%.
Challenging the gold buyers is the US dollar strength that cheers its safe-haven demand and upbeat fundamentals. Due to the same, the US Federal Reserve is mostly expected to stand pat during its monetary policy decision on Wednesday.
Ahead of that the US Durable Goods Orders and consumer confidence numbers could offer intermediate directions while news/headlines will be the key to follow.
Technical Analysis
Only if the prices break below a monthly trend line, at $1,560 now, sellers can take aim at $1,535 else chances of the precious metal’s run-up towards marking fresh multi-year high beyond $1,612 remain on the cards.