Gold price slightly decreased on Friday (by 0.3%) due to the statements made by the World Health Organization regarding the new coronavirus. The institution stated that currently the virus spread has not yet become a global emergency.
According to WHO, the virus remains a local problem constrained in certain regions of China. Overall, the market remains quite stable in demand for protective assets, since the media regularly publish information on new virus victims in various world regions. It's also very concerning that the virus may very well accelerate its spread during the lunar New Year celebrations in several Asian countries, since this holiday is one of the largest annual migrations for most of the Asian region.
In addition to geopolitical news it is important to closely monitor the publication of preliminary data on PMI of production and service industries in the EU, USA and other regions of the world. Weaker data may increase concerns about the prospects for the global economy and will help strengthen gold.
On the chart, the bulls again failed to overcome the resistance at the level of 1567.85. This is a signal of a future retreat development. Most likely in the coming days, trading will take place in the horizontal range of 1550.00-1567.85.
Resistance Levels: 1567.85, 1585.00, 1600.00;
Support Levels: 1550.00, 1542.00, 1530.00.
The main scenario - a decline towards 1550.00.
An alternative scenario - a breakdown of resistance at the level of 1567.85 and an increase towards 1585.00.
The fundamental outlook is neutral. We suggest trading based on the border of the flat 1550.00-1567.85.