Gold remains on the front foot following US President Trump’s speech
- Gold traders refrain to respect US President Donald Trump’s upbeat comments.
- Coronavirus headlines keep the driver’s seat while the economic calendar will also be important during the day.
Gold prices trade around $1,645, +0.50%, during the Asian session on Thursday. The yellow recently popped to the intra-day high of $1,645.18 but dropped around $1,642 afterward as the US President Trump tried to placate investors with this speech.
“We are ready to act and do whatever we have to. The risk to the American people from the virus is very low,” said US President Donald Trump during the news conference joined by the members of the US Coronavirus Task Force.
The Republican leader earlier mentioned that media outlets were "doing everything possible to make the coronavirus look as bad as possible, including panicking markets, if possible."
Following the news, the US 10-year treasury yields remain mildly positive to 1.33% whereas S&P 500 Futures mark 0.10% gains to 3,101 by the time of writing.
The coronavirus fears have been weighing on the market’s risk-tone as an outbreak ex-China seems to be faster and affecting global supply. The recent examples came from Italy’s MTA that is likely to affect major automobile companies including FIAT, Renault, Peugeot and BMW.
There are positive updates as well, upon which markets seem to pay a little heed off-late, like claims of developing a cure by various institutions from the US and China which still needs to be tested properly.
In order to counter the deadly COVID-19, governments in Asia and Europe have already stepped forward by announcing special stimulus measures. However, the situation remains murky unless the cure to the epidemic remains absent.
Other than the coronavirus headlines, US economics will also be the keys to watch for the day. The second estimation of the US Q4 GDP and January month Durable Goods Orders will be important as traders will seek clues of how the world’s largest economy is affected due to the contagion. Westpac said, “The second estimate of US GDP is expected to see little change from the advance estimate of 2.1% annualized (i.e. 0.5% q/q). Jan durable goods orders are seen -1.5% m/m, +0.2% ex-transport. Jan pending home sales and the Feb Kansas City Fed manufacturing survey are also due. Finally, Chicago Fed President Evans will speak in Mexico City.”
Technical Analysis
The recent lows near $1,625 as well as January month top around $1,611 can keep the bullion’s short-term declines limited. On the upside, $1,665 and $1,700 are on the bull’s radar.