For the second day in a row, gold prices are trying to correct higher, taking advantage of the US dollar's gains, with the yellow metal's gains reaching the $1575 level at the time of writing. After losing last week to pushing it to the $1455 support. Markets are cautiously awaiting the passage of the US$2trillion bailout plan to stimulate the US economy, and thus the world, in the face of the negative effects of the deadly Corona epidemic that paved the way for a global economic recession which may outpace the recent global financial crisis during 2008-2009. Markets are digesting the massive stimulus measures undertaken by global central banks and governments in the face of the epidemic that has paralyzed the global economy and killed more than 15,000 people around the world.
Despite the global suffering from the deadly Corona epidemic, China, the source of the epidemic, has gradually started to recover. As the Chinese authorities lifted the ban on most of Hubei Province, which was initially plagued by the epidemic. The people cleared will be able to leave the province after midnight on Tuesday. Wuhan, where the outbreak began in late December 2019, will remain closed until April 8. As is well known, China prevented people from leaving Wuhan from January 23 and expanded the embargo to most of the province in the following days.
The radical steps came when the new COVID-19 coronavirus began spreading to the rest of China and beyond during the Lunar New Year holiday, as many Chinese travel to spend their holidays. Hobby has not seen any new cases of the disease in more than a week.
The sharp rise of the US dollar, which moves in the opposite direction of gold prices, was due to companies around the world disposing assets in an attempt to raise funds. Outside the United States, companies are in desperate need for the dollar to serve an ever-increasing wave of dollar loans as dollar revenues dry up. Emerging markets were the most affected by the strong dollar, as companies and families increased borrowing by dollar loans. The US dollar index DXY, which measures the performance of the US dollar against a basket of six competing major currencies, fell -1.050%, after rising to its highest level in more than three years last week.
According to gold technical analysis: As we mentioned before, with a recommendation to buy gold from every downtrend despite the strong US dollar, the yellow metal may return sooner or later as a safe haven of choice for investors in times of uncertainty. Bulls' control may increase if gold prices move towards resistance levels at 1582, 1600 and 1625, respectively, to move the metal to new record highs. According to the performance on the daily chart, the $1445 support is the key for the downside reversal strength.
As for the economic calendar data: Gold price will react today with the announcement of PMI readings for the industrial and services sectors for the Eurozone, Britain and the United States of America.
