Daily Brief, Feb 17: US Bank Holiday – How to Trade Gold Today?
The yellow metal gold violated the double top resistance level of 1,577, and violation of this level has extended the buying trend until...
Today in the early Asian session, the safe haven metal prices were flashing green and hit 2-week highs at $1580 mainly due to the broad risk-off market sentiment in the wake of ongoing coronavirus fears. As of writing, gold is currently trading at 1,583.84 and representing a +0.08% gain on the day. The latest negative headlines regarding Brexit also boost the market risk-off sentiment.
It should be noted that Chinese officials are continuing to struggle to satisfy the market. The central bank injected 300 billion Chinese yuan liquidity and also announced corporate tax cuts as well as an increase in fiscal spending to stable market risk-sentiment. However, they have been less successful so far.
At the coronavirus front, the Chinese officials have struggled too much to improve the risk sentiment, which is severely disturbed by the fears of the coronavirus. As a result, the market showed a slight improvement in the risk-tone. On the other hand, concerns of coronavirus have been conveyed by Moody’s and the IMF.
As a result, the US ten-year treasury yields and the German bunds remain defensive. However, global equities seem to portray the mixed signs amid upbeat signals from the US.
At the Brexit front, fears of a hard Brexit also played their part in the markets’ risk-off sentiment. Additionally, the European Union (EU) leaders don’t see themselves in a comfortable position during the Brexit trade deal talks up for early March.
Looking forward, the risk-off market sentiment will keep the safe haven metal on the buyer’s radar. Whereas, the lack of US traders may give rise to an inactive training session. However, the preliminary reading of Japan’s fourth quarter (Q4) GDP, expected -0.9% against +0.4% prior, can offer immediate direction to the bullion.
Daily Support and Resistance
S1 1558.58
S2 1569.76
S3 1576.77
Pivot Point 1580.94
R1 1587.95
R2 1592.12
R3 1603.3
On Friday, the yellow metal GOLD violated the double top resistance level of 1,577, and violation of this level has extended the buying trend until 1,582 level. At the moment, the pair is holding above 1,582 level, which is likely to drive further buying in the precious metal. On the higher side, the pair has the potential to go after 1,588 later in the day. Good luck!
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