Gold Intraday: Safe-Haven Demand Fades on Easing Coronavirus Cases

U.S. recorded the smallest increase in new confirmed coronavirus in nearly a month yesterday, while U.K. and Italy also showed slower pace of spread...

Gold 5

Spot gold lost 0.9% on day to $1,714 on Monday and dipped further to $1,704 during Asian trading hours today. According to Johns Hopkins University, U.S. confirmed coronavirus cases rose 2.3% yesterday, the smallest increase in April, while U.K. and Italy also showed slower pace of spread. Global central banks have introduced a series of rate-cuts and quantitative easings during the crisis, and passing the coronavirus peak would imply that ultra-loose monetary policies maybe about to end. Will this mark a downturn for gold price remains to be seen, the intraday outlook for the precious metal does not look decent.

From a technical point of view, spot gold is under pressure as shown on the 1-hour chart. It has retreated after another failed attempt to break through its previous high, and has now broken below a bearish descending triangle pattern. The level at $1,721 may be considered as the nearest resistance, with price likely to head towards $1,691 (38.2% Fibonacci retracement of the rally started in April 21) and $1,680 in extension. In an alternative scenario, a break above $1,721 might suggest that it would test $1,739 again.

Source: TradingView, GAIN Capital

Build your confidence risk free

More from Gold

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.