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Gold: Slips below 21-day SMA to register three-day losing streak

  • Gold remains mildly weak amid broad risk recovery.
  • The receding risk of coronavirus and expectations of the recovery afterward keep markets happy.
  • Global central bankers continue to remain cautiously optimistic.
  • Inflation numbers from Australia, Germany and the US will be important for the day.

Gold stays under pressure while taking rounds to $1,566 amid Thursday’s Asian session. The bullion has been on a soft footing off-late amid concerns that China’s coronavirus is a short-term challenge to the markets and that the macro fundamental recovery is expected then after.

Central bankers don’t consider coronavirus as a big challenge…

Although China’s epidemic is likely to have broad economic impacts, the diminishing rate of contagion is what pushes the global central bankers from the US, Europe and New Zealand to term it as a short-term challenge.

However, global rating giant Fitch and the World Health Organization (WHO) head Tedros Adhanom Ghebreyesus still stay cautious enough and wait for it over before stepping back to relax mood.

Markets will now pay attention to the RBA’s Governor’s say for coronavirus when he participates in a debate around 00:15 in Australia. The central banker previously gave high importance to the epidemic and considered it as a bigger negative to Australia than SARS.

That said, the US 10-year treasury yields and Wall Street, the headline risk barometers, register noticeable gains by their Wednesday-end trading session.

The economic calendar is back in focus…

With the news headlines relating to coronavirus likely to have lesser negative importance, unless being surprising, traders will return to the economic calendar as the key driver. As a result, the upcoming inflation signals from Australia, Germany and the US will be important to watch.

Among them, price pressures in the US and Australia are likely to recede while that of Germany may flash no major changes in inflation data.

Technical Analysis

With the yellow metal’s decline below the 21-day SMA level of $1,568, prices are likely to revisit the monthly low near $1,547. However, an upside break of the short-term SMA needs to cross $1,570 mark to diver buyers towards Monday’s top of $1,577.


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