The gold price continues to rise amid concerns about the coronavirus epidemic spread and its impact on the global economy.
Gold was supported by preliminary data on China's GDP for the 4th quarter of 2019, which showed a 6.3% decrease in annual growth. Investors fear that the Japanese economy will continue to shrink due to the negative impact of the coronavirus epidemic.
China continues to strengthen its response to the epidemic. Information was released today regarding the tightening of restrictions on movement in Hubei Province, which is the epicenter of the spread of the virus. According to reports from the South China Morning Post, residents of the province are required to stay at home and are prohibited from using private vehicles. Only one family member is allowed to leave the house once every three days to buy food and essential goods. The Chinese authorities hope that these measures will stop the spread of the disease. Hubei accounts for more than 80% of confirmed cases of the new virus.
Regarding the chart, the price almost reached the previously noted target at the level of 1585.00. So far we do not see a strong reaction of the price to this mark. Therefore, as a priority, we consider a scenario with a breakdown of this level and the development of upward movement towards 1600.00.
Resistance Levels: 1585.00, 1600.00, 1611.00;
Support Levels: 1580.00, 1575.00, 1563.00.
The main scenario - a breakdown of resistance at the level of 1585.00 and an increase towards 1600.00.
An alternative scenario - a decline towards 1575.00.
The fundamental outlook is slightly positive. Bullish signals prevail locally on the chart. Within the daily framework, we consider longs from the levels of 1580.00 and 1575.00.