Gold bounces back beyond $1,650 as cornavirus fears renew

• Gold ignores the previous day’s declines amid fresh challenges to the risk-on.
• The widespread coronavirus outbreak in the US, the UK and Europe push policymakers towards the stimulus, Australia being the latest one while the US is in the line.
• California’s Coachella festival delayed, speculations of the Tokyo Olympic postpone refresh.
• Politico raises doubts over US VP Pence’s claims of enough resources in the lab.

After falling to the lowest in three days, Gold prices gain fresh bids to $1,653 amid Wednesday’s Asian session. The yellow metal seems to recover losses, piled due to risk rebound, as fresh headlines concerning coronavirus (COVID-19) renew fears of the pandemic.

Not only the Trump administration’s inability to offer any major details of US President Donald Trump’s ‘major’ economic response to the virus, but the absence of the Republican leader in the Coronavirus Task Force Briefings also raised initial doubts over the Tuesday’s risk recovery.

Extending the moves were recent coronavirus updates and Politico’s claims that the US labs face shortages of resources to test the infected people.

On the other hand, the idea of postponing the Tokyo Olympics regained market attention despite being turned down by the Japanese diplomats the previous day. Also, cancellation of California’s Coachella festival and news of the UK Health Minister being infected with the deadly virus added to the risk aversion.

As a result, the US 10-year treasury yields start trimming their earlier run-up to 0.80%, while taking rounds to 0.75%, whereas S&P 500 Futures slip more than 1.5% to 2,819 by the time of writing.

It should also be noted that Australia’s PM Scott Morrison announced the Australian dollar 2.4 billion worth of health package while extending travel ban to Italy before a few minutes.

Given the recent shift in the market’s risk tone, investors will keep eyes on the COVID-19 updates for near-term direction.

Technical Analysis

A sustained refrain to slip below 10-day SMA, currently at $1,641, keep portraying the yellow metal’s strength.