The gold price holds close to seven-year highs while yesterday crossed the high from January after the U.S. killed a top Iranian general. Coronavirus outbreak is gold positive as the uncertainty and the negative economic impact shifts investors attention to safe-haven assets. Earlier today new measures from PBOC failed to calm investors at least for now. PBOC cut the benchmark one-year prime rate by 10 bps, and the five-year prime rate by 5 bps. Yesterday the People’s Bank of China cut the one-year medium-term lending rate to 3.15% from 3.25%.
As of writing the PBOC failed to impress investors, the gold price is 0.08% lower at $169.45. Silver price is 0.93% lower at 18.23 as investors are taking some profits off the table after the recent rally.
Gold price trades close to seven-year highs as the bullish momentum which started in mid December is intact. Positive bias for the precious metal will hold as long as the price holds above the $1600 mark.
On the upside, first resistance for gold price stands at $1612.85 the daily and seven years high. A break above might test next resistance at $1616 the high from March 22, 2013.
On the downside, first support for gold stands at $1604.06 the daily low. The next support area would be met at $1599.47 the low from yesterday’s trading session. If the gold price breaks below, sellers will target the low from February 18th at $1,580.