Yesterday was a relatively quiet day for gold price. Despite rising numbers of coronavirus cases, upside movement on XAUUSD was limited. There are now 82, 167 confirmed cases worldwide with the death toll up at 2,801. There have been reports that the infection has spread in Europe with Denmark reporting its first case.
On the 1-hour time frame, we can see that gold price spent all of yesterday’s trading in a range. XAUUSD bounced off support around $1,628.00 and resistance at $1,654.60. By drawing the Fibonacci retracement tool from the low of February 20 to the high of February 24, we can see that XAUUSD found support at the 61.8% Fib level.
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As of this writing, the commodity is still trading within the range. XAUUSD traded higher at the start of today’s session following US President Donald Trump’s press conference. He attempted to ease market and public concerns about the impact of the coronavirus in the US. However, the dollar weakened at the wake of his speech.
In forex trading, a consolidation is often interpreted as a sign that the market is undecided. A break of yesterday’s highs at $1,654.81 could mean that gold price would soon rally above $1,689.00. On the other hand, a close below yesterday’s low at $1,624.77 would invalidate support at the 61.8% Fib level. It could also be a sign that XAUUSD may soon drop to its February 20 lows at $1,606.50. This could be triggered by positive US data. Later today, at 1:30 pm GMT, the preliminary reading of the US Q4 2019 GDP report is due. It is expected to come in at 2.1%. A better-than-expected figure could strengthen the dollar and push XAUUSD lower. On the other hand, a disappointing figure may drive XAUUSD higher.