News and Data:
- February 17: USD Bank Holiday
- February 19: USD Building Permits 1.55M vs 1.45M expected
- February 19: USD Corn PPI m/m 0.5% vs 0.1% expected
- February 19: USD PPI m/m 0.5% vs 0.1% expected
- February 20: USD FOMC Meeting Minutes
- February 20: USD Philly Fed Manufacturing Index 36.7 vs 10.1 expected
- February 20: USD Crude Oil Inventory 0.4M vs 3.3M
- February 21: USD Flash Manufacturing PMI 50.8 vs 51.5 expected
Investors continue to buy the safe-haven asset, yellow metal, amid the Coronavirus outbreak and economic slowdown fears although the price of gold was at the highest on Monday since early 2013. After bouncing off $1,700 mark from the retracement of the rally, gold prices are struggling to hold support at $1,650 an ounce following Monday’s massive rally to a fresh seven-year high. Despite Tuesday’s selling pressure, gold prices will continue to move higher through the second quarter
It is seen that there are buyers waiting to buy on dips as gold is the safe haven that people are keeping when dealing with the coronavirus and everything else that’s going on around the news right now. Apparently, it has continued to work for the time beings as if the market is simply buying first and asking questions later. With that being said, the gold market is very obviously bullish. To the downside, it is anticipated that the $1600 level could be the support for the longer-term trading.
Investors will now wait for today’s CB Consumer Confidence number release. But the question is “Will the coming series of economic news data be more important than the mentioned virus fears in the coming days and weeks?”
Gold has started to gain good momentum. After breaking above the strong resistance at $1,611 on the 20th February 2020, price has so far peaked at a high of $1,689. Whether this high will cause further problems for price is anyone’s guess but as price has started to pull back, a break and close above this high will confirm a continuation to the upside.
If the current pullback drops any further, then the next obvious level that price my move towards is $1,611 which is the resistance turned support from the 8th January 2020 high. It’s the opportunity to buy dips for big reward as gold uptrend momentum is still very strong.