Gold Price Forecast - XAU/USD Hits a Two-Week High as Risk Markets Crack
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Gold Price (XAU/USD), News and Chart
- Fears of a coronavirus breakout after Chinese authorities confirm a fourth death.
- Gold looking to break higher – charts remain supportive.
Gold Price (XAU/USD) Bid as Pneumonia Outbreak Spreads
Chinese officials are investigating an outbreak of the deadly pneumonia outbreak – coronavirus - which has already claimed four victims and is now seen spreading outside China. The outbreak has spread from Wuhan already to Shanghai and Beijing and four cases have been reported in Japan, Thailand and South Korea. According to one newspaper a man has also been quarantined in Australia with the flu-like symptoms, with 291 new cases being reported in China.
Fears are that this airborne virus may prove as deadly as the SARS outbreak in China between November 2002 and July 2003 which resulted in over 770 deaths in over 30 countries. Risk markets turned lower again on Tuesday with European equity markets opening around 0.75% to 1.0% lower, while luxury good companies fell sharply on fears of disrupted sales.
The daily gold chart still suggests higher prices although a period of consolidation would help to strengthen this outlook. Gold has made a series of higher lows over the last week off the January 14 low of $1,536/oz. and earlier broke above the recent $1,563.5/oz. high that has capped upside momentum. The spot price trades above all three moving averages while the CCI indicator suggests that the market is neither overbought or oversold. If gold can consolidate above the prior high at $1,557/oz. then a fresh press higher becomes more likely, especially with risk markets turning broadly negative.
Gold Daily Price Chart (April 2019 - January 21, 2020)
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