Gold probes $1,650 as US Pres. Trump presents coronavirus action plan
- Gold remains on the front foot amid macro pessimism.
- Aussie PM earlier announced fiscal stimulus.
- Coronavirus updates from the US and Italy remain as disappointing.
- UK PM’s emergency meeting, ECB in the spotlight.
Gold prices seesaw around $1,646, after the initial tick-up to $1,650.16, after US President Donald Trump released details of his action plan to confront coronavirus (COVID-19) during Thursday’s Asian session.
Read: Trump: We will defeat this virus, US will suspend all travel from Europe to US for next 30 days
Earlier during the day, Australia PM acted on his promise of a multi-billion dollar worth of fiscal stimulus while the Aussie Treasurer Frydenberg gave details of cash disperse.
This joins the macro rush to counter the pandemic, the status recently bestowed by the World Health Organization (WHO), where Japan, the US and Europe have already undertaken heavy measures.
Global policymakers have so far run quite an aggressive show to counter the deadly virus with heavy rate cuts from the key central banks joining fiscal stimulus from the respective governments.
However, the efforts have been termed as less efficient amid a lack of major positive news as well as the hammering of Chinese headlines that term the approaches as downplaying the seriousness.
While taking clues from the broad moves to counter COVID-19, the holdings in the gold Exchange Traded Funds (ETF) surged by 55 tons in the previous three days, or 1.8 million ounces, close to a third of the year-to-date inflows, as per Bloomberg.
It’s worth mentioning that the fresh missile strike in Iraq, which killed two US and one UK individual, also favors the risk-off moves. Further, the Washington State announced an increase in cases and pushed the death toll to 29 whereas Italy released directions for doctors and nurses relating to whom to treat amid a lack of medical professionals amid the outbreak of the disease.
Amid all this, the US 10-year treasury yields decline two basis points to 0.80% whereas stocks in Asia also register losses.
Following the fiscal announcements from Australia and the US, UK PM Boris Johnson is up for an emergency meeting in this regard while the ECB has a scheduled meeting on the cards to make traders busy.
Technical Analysis
A sustained decline below a 21-day SMA level of $1,627 becomes necessary for the bears to take over from the bulls targeting a run-up towards $1,680.