Gold rebounds from five-week low towards $1600 amid fresh risk reset
- Gold prices snap the three-day losing streak as trade sentiments improve.
- BOJ’s liquidity infusion offers a temporary boost to the markets.
- Comments from the US, Australia add strength to the pullback.
- Coronavirus risk continues to haunt the global financial markets.
Gold prices flip from the five-week low to $1,588, up 0.70%, before the European session begins for trading on Friday.
Global investors lost the confidence in the yellow metal off-late, due to the broad selling in financial markets, which in turn portrayed three-day losing streak of the bullion. Though, the latest liquidity infusion worth of JPY 700 billion by the Bank of Japan seems to keep the lid on the market’s risk reset.
Following the news, the US 10-year treasury yields accelerate their run-up beyond 0.80% to 0.84% while the US equity futures also rebound from the early-day losses to near 3.0% profits each. Further, stocks in Asia, as per MSCI’s index of Asia-pacific shares outside Japan, also portray the risk recovery by reversing the early-day losses of more than 5% to 1.36% by the press time.
Other than the efforts from Japan, comments from the Australian Chief Medical Official and the US House Speaker Nancy Pelosi also offered a little relief to the traders.
Even so, the risk from the pandemic continues to remain high as Spain and Italy have suspended some stocks from trading while there won’t be any floor trading at the CME from today onwards. Additionally, the global rating giant Fitch cited further risks to structured finance.
Amid all these the volatility in the markets continues to increase and disappoints traders, which in turn highlights the importance of each incoming catalyst for the immediate moves while coronavirus news will be the key.
Technical Analysis
100-day SMA close to $1,536 can lure the bears during fresh downside while $1,600 and 21-day SMA near $1,625 could please the buyers in a case of further advances.