Gold prices rose on Thursday after China announced a sharp increase in the number of deaths and new confirmed cases of coronavirus.
The authorities of Hubei Province, which is the focus of the spread of the virus, said that after applying the new diagnostic methodology, an additional 242 deaths and 14,840 cases of virus infection were detected. These reports led to an increase in the value of all defensive assets, including gold and the Japanese yen. Many media report that the epidemic is much larger than China’s official figures.
In addition to news from China, investors today will follow the publication of the US inflation report for January. This data has a strong impact on market expectations regarding possible adjustments of the FRS monetary policy.
Regarding the chart, the bulls managed to defend the level of 1563.00. The price bounced up, so today we consider the scenario with the development of an upward movement in the direction of the level of 1585.00 as a priority.
Levels of resistance: 1585.00, 1600.00, 1611.00;
Support Levels: 1563.00, 1550.00, 1542.00.
The main scenario - an increase towards 1585.00.
Alternative scenario - the breakdown of support at 1563.00 and a decline towards 1550.00.
The fundamental outlook is moderately positive. Within a short-term period we consider longs near the level of 1563.00.