Gold prices justify Wednesday’s gravestone doji as staying below $1,650
- Gold snaps two-day recovery amid risk reset.
- US dollar pullback, upbeat data and the global policymakers’ fight against coronavirus seem to contribute to the risk reset.
- US data, COVID-19 updates will be important for near-term direction.
Gold prices pull back from five-day high to $1,637.50, down 0.07%, during the Asian session on Thursday. While the US dollar pullback from monthly lows can be considered against the yellow metal’s recent upside, the recent recovery in risk-tone has also contributed to the bullion’s weakness.
Not only the rate cuts from the top-tier central banks but the use of fiscal measures and policy actions have also boosted the traders’ anticipation that the global policymakers are doing all they can to confront the deadly coronavirus (COVID-19).
With this, the broad risk-off seems to have stepped back, which in turn helps the US 10-year treasury yields to recover from the record low to 1.05% by the press time.
On the other hand, upbeat prints of the US ISM Non-Manufacturing PMI and ADP Employment Change contributed to the US dollar pullback from the early-January lows.
Even so, an increase in the numbers of the global coronavirus outbreak and the latest state of emergency declared by Californian Governor over COVID-19 seem to support the risk aversion. Earlier during the day, policymakers from Australia and South Korea have also raised concerns about the deadly virus.
That said, any updates relating to the pandemic will be the key to forecast near-term trade direction of the safe-haven.
Technical Analysis
A bearish candlestick formation on the daily chart caps the yellow metal’s short-term upside around $1,655.