Metals

Coronavirus Helping Gold Extend Its Rally

Posted 01/31/2020 8:33AM CTNicholas DeGeorge

In the early morning trade, April gold has rebounded nicely off its overnight low and continued its rally mostly due to the fear of the coronavirus spreading even more throughout China and certainly slowing down their economy. Furthermore, anxiety on global growth slowing as well as travel due to this situation has helped push gold prices and bonds/notes higher. ETF’s saw their holding rise for the seventh-straight week of inflow putting their holdings to the highest in over 12 months. However, if there is any positive news that comes out of the World Health Organization (WHO) on progress of global containment, then look for a possible big pull back to pre-virus levels.

If we take a quick look at the daily April gold chart, you’ll clearly see that after it broke above the down trend on Christmas Eve, the shiny one has been in bullish trend ever since breaking new highs and trying to attack them again. As long as gold stay above $1,542 support, then look for the potential for it to break another contract high becomes more likely.

Gold Mar ’20 Daily Chart

Nicholas DeGeorge

Nicholas DeGeorge began his financial career in the mortgage/ banking industry. After a successful seven year career, he had an opportunity of a lifetime to trade for one of the larger proprietary day trading firms at the Chicago Board of Trade. While there, he specialized in trading energy (mostly crude oil), metals and e-mini S&P 500. After two years of being a proprietary trader, Nicholas became a Senior Commodities Broker at MF Global and worked for the top commodity trading adviser at the firm. While he was there, he learned a great deal about position trading and was exposed to other markets like grains and soft commodities. Nicholas attended Eastern Illinois University.