Gold decreased by 0.4% amid a recovery in global stock indices. Despite reports of an increase in the number of people infected with the deadly coronavirus, Asian indices completed today's trading in the green zone. Therefore, demand for gold and other protective assets declined. Experts note the weakening of market fears related to the impact of the coronavirus epidemic on the global economy.
Gold is further pressured by unexpectedly positive PMI data of the US manufacturing sector from the ISM reports. Over the month, the indicator increased from 47.8 to 50.9 points, reaching its highest level since August 2019. Experts believe that the signing of an interim trade agreement between the US and China was the main driver of the growth of the indicator.
Currently, important news is absent in the US economic calendar, so the dynamics of gold will depend on the situation on the stock exchanges and the dynamics of USD.
Regarding the chart, bearish signals prevail locally. Bears increase pressure on intraday support at the level of 1569.50. With high probability today we can expect a breakdown of this mark and a development of a downward movement in the direction of the level of 1550.00.
Resistance Levels: 1578.50, 1585.00, 1600.00;
Support Levels: 1550.00, 1542.00, 1530.00.
The main scenario - a breakdown of support at the level of 1569.50 and a decline in the direction of 1550.00.
An alternative scenario - a consolidation within the flat of 1569.50-1585.00.
The fundamental outlook is moderately negative. Bearish signals still prevail. Within the daily framework, we consider shorts from the level of 1578.50.