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.