Some optimism has returned to the financial markets after the recent actions by the United States of America to face the consequences of the Coruna epidemic and its threat to global economic growth. This supported the return of investors’ purchase of gold after the recent collapse, reaching the $1451 support, which was recorded yesterday, the lowest in more than three months. The recent purchases pushed the price of an ounce of gold to move towards the $1553 level before returning to stability around the $1507 level at the time of writing. There is a clear reflection of the gold’s general trend since the beginning of sales from the $1700 psychological resistance, the highest in seven years.
Among the US measures to stimulate the world's largest economy in the face of a possible recession from the Corona epidemic, Trump administration has announced that individuals and companies will be allowed to delay paying their 2019 tax bills for 90 days after the usual April 15 deadline. The extension is an attempt to pump up to $300 billion into the economy at a time when the coronavirus is emerging as a major cause of recessions.
US Treasury Secretary Stephen Mnuchin said individuals would be able to delay payment of up to $1 million in payments. The companies will be able to postpone the payment up to 10 million dollars. Taxpayers will still have to file their tax returns by the April 15 deadline. But they will not have to pay their tax bill for an additional 90 days. During that time, individuals and companies will not be subject to payment of interests or fines. "All you have to do is submit your tax return," said Manuchin.
The Treasury secretary added that President Donald Trump agreed to the final details of the program, including the possibility of allowing taxpayers to keep $300 billion in the economy at the present time. Last week, Mnuchen estimated that the deferred payment would be $200 billion.
The latest measures by the US government and the Federal Reserve were extremely necessary to maintain the performance of the US economy until a vaccine is found that eliminated the Covid-19 virus that killed nearly 8,000 people and infected more than 190,000 people and spread almost all over the world. This epidemic is causing an economic recession that exceeds the recession caused by the global financial crisis during 2008-2009.
According to technical analysis of gold: the downward pressures of gold still stands with the weak liquidity in the global financial markets, which is the strongest explanation for the recent collapse of gold prices, despite the continuing Corona outbreak and the panic of the world and financial markets. Therefore, gains may remain at the present time selling targets, as returning to the natural liquidity of the markets after the recent heavy losses may take more time. Therefore, resistance levels at 1545 and 1600 may be selling targets if gold moves there. What will increase the bears' control over performance is the move towards the $1400 psychological support. From there, there will be strong thinking about strong purchases.
The gold price will react to the announcement of inflation figures for the Eurzone, US building permits and Canadian inflation.
