Gold Loses Shine on Moderating Coronavirus Fears

Spot gold posted the largest decline in nearly two weeks yesterday, amid growing signs of easing coronavirus pandemic...

Gold 1

Spot gold dropped 1.6% to $1,686.5 yesterday, the largest decline in nearly two weeks. Despite gloomy GDP data from the Eurozone and the U.S., the coronavirus crisis appears to be moderating. Following other European countries, U.K. Prime Minster Boris Johnson said he will propose plans to unlock the economy in the coming weeks and declared that his country has passed the coronavirus peak

In the U.S., the number of new coronavirus cases rose just 1.2% on Thursday, the smallest increase in April, according to Johns Hopkins University. Meanwhile, National Institute of Allergy and Infectious Diseases director Anthony Fauci said on a NBC interview he expects the Food and Drug Administration to approve remdesivir, a potential treatment to coronavirus patients, relatively soon.

Form a technical point of view, spot gold extended its bearish run as shown on the 1-hour chart. After a recent decline, it has broken below its previous trading range and has potentially formed a lower-high. Bearish investors might consider $1,700 as the nearest intraday resistance, with potential downside targets at $1,671 and $1,661. In an alternative scenario, a break above $1,700 may trigger a revisit to $1,709 and $1,722 on the upside.

Source: TradingView, Gain Capital


More from Gold

Related Articles

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

GAIN Capital UK Limited (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.