Gold recovers to $1,579 as coronavirus updates weight on risk-tone
- Gold stops the previous day’s declines amid the fresh rush to risk-safety.
- Moody’s signaled challenges to China’s consumption, Hyundai halted some production due to coronavirus.
- RBA can offer immediate direction, headlines concerning Chinese epidemic will be the key to watch.
Gold takes the bids near $1,579 amid Tuesday’s Asian session. While the risk reset dragged the yellow metal during the previous day, the recent challenges emanating from China keep the bulls hopeful.
Risk-off again?
The latest updates from China’s Hubei, the epicenter of coronavirus, suggest an increase of 64 people who lost their lives while 2,345 join the infected people due to the lethal contagion.
This pushes the Moody’s to cite a likely deterioration in Chinese consumption and challenges to the government. This becomes the first negative comment from the global rating giant and many more could follow soon.
While most of the global peers have curtailed their trade/travel relations with China, South Korea’s key economic player Hyundai has to stop some production lines due to the lack of parts coming through Beijing.
In a reaction to the same, S&P 500 Futures declines 0.16% to 3,240 by the press time. It should be noted that Wall Street and the US bond yields have summed up for Wednesday after marking a halt to the previous risk-off.
In addition to the updates concerning coronavirus, which will be the key catalyst, investors will also keep eyes on the economic calendar that carries the RBA interest rate decision and the US factory orders. Forecasts favor a dovish halt by the RBA whereas the US Factory Orders may recover to 1.1% from -0.7% prior.
Technical Analysis
A confluence of the three-week-old rising trend line and 21-day SMA could restrict the bullion’s near-term declines around $1,566/65. Alternatively, $1,600 remains on the bulls’ radar.