The price of gold continues to decline despite the fall in the global stock market. On Wednesday, bears intensified after the World Health Organization (WHO) declared COVID-19 to be a pandemic.
On Thursday, the cost of gold continues to decline (-0.45%). Experts note that this reaction is caused by the speech of Donald Trump, who announced the closure of entry to the United States from the EU for a period of 30 days. Market participants were disappointed with the speech of the American president, because he did not present effective measures to combat the epidemic. Many bidders expected public health programs to be implemented: paid sick leave, free testing, and free treatment. But the president did not even touch on this topic in his speech.
Despite the local decline in gold, in our opinion, sales will be limited in scale and time. The global stock market continues to fall, maintaining a consistently high level of demand for defensive assets. Trump's ban on entry from EU countries collapsed stocks of major air carriers. World indices continue to fall. The Australian S&P / ASX 200 fell by 7.31%, the Japanese Nikkei 225 lost 5.59% of its value, the South Korean KOSPI fell by 4.62%, Hong Kong's Hang Seng slipped by4.67% and the Chinese Shanghai Composite fell by 1.71% . European platforms also begin trading in the red zone.
In the economic calendar, the central news of the day will be the ECB's decision on interest rates.
Regarding the chart, the price has reached the key support level - 1635.00. While the bulls continue to keep the price above this mark, the scenario with the growth of quotes remains a priority. In case of a breakdown of this level, we can expect a sharp decline in quotations in the region of 1605.00.
Resistance Levels: 1650.00, 1680.00, 1700.00;
Support Levels: 1635.00, 1605.00, 1575.00.
The main scenario - an increase in the direction of 1680.00.
An alternative scenario - a consolidation below the level of 1635.00 and a decline towards 1605.00
The fundamental outlook is moderately positive. We consider longs from the level of 1635.00.