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Demand for gold grows amid fears of the second wave of the COVID-19 pandemic

May 12 2020, 01:50 PM (BDT) | Fortfs.com

Gold restores lost positions due to growing fears about the start of the second wave of the COVID-19 pandemic.

 

Investors are now closely following the news from China and South Korea. In Wuhan, where the COVID-19 virus was initially detected, on Monday 5 new cases were recorded after a long break. There is growing concern that a weakening of quarantine measures could lead to a re-outbreak of the pandemic.

 

In the South Korean city of Itaewon, 47 new infections were recorded within a day. News agencies report that the virus is spreading in the city’s nightclubs.

 

The epidemiological situation in Russia is also concerning. The country came in third by the number of infected cases. Over the past day, a record number of new cases was recorded (+11 656).

 

Considering the above, investors again give their preference to traditional protective assets, fearing the deterioration of the epidemiological and economic situation in key regions of the world.

 

The economic calendar today will focus on news from the United States. Data on the consumer price index for April is expected, as well as speeches by FOMC members: Bullard, Kashkari, Harker and Quorles.

 

Flat movement in the channel 1695.00-1722.00 continues to develop on the chart. As a part of this outlook today, we can expect a moderate increase in quotations in the direction of the level of 1722.00.

 

Resistance Levels: 1722.00, 1740.00, 1750.00;

 

Support Levels: 1695.00, 1670.00, 1645.00.

 

The main scenario - consolidation in the range of 1695.00-1722.00.

 

An alternative scenario - a breakdown of support at the level of 1695.00 and a decline in the direction of 1670.00.

 

The current fundamental outlook is moderately positive. Within the daily framework, we consider longs from the level of 1695.00.

 

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