Gold Price Jumps on News of Baghdad Blast and China Coronavirus

Blasts in Baghdad’s Green Zone Drive Gold Price Higher

Gold price surged in today’s Asian session as market sentiment is slowly tilting to risk aversion. XAUUSD jumped $8.6 in an hour to $1,568.46. This was following news that there were blasts in Baghdad’s Green Zone. The causes and casualties are still unknown. However, there are speculations that rockets might have been fired in the area where US military bases and the US Embassy in Baghdad are.

Coronavirus Spreading Worries Investors

Additionally, news of the coronavirus spreading also seems to be worrying investors. It is now reported that 200 people are infected from 136 during the weekend. There are 4 deaths associated to the disease and it has reportedly spread to four countires (China, Japan, Thailand, and Australia). Overnight, the World Health Organization (WHO) announced an emergency meeting to come up with a plan to contain the virus. Consequently, demand for safe-haven assets like gold, rose.

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Gold Price Outlook

On the hourly time frame, gold price looks to have bounced off support at the rising trend line (from connecting the lows of January 14, January 16, and January 17). A couple of reversal candlesticks have materialized which may indicate that gold price could soon fall. There is near-term support at $1,562.70. The area around this price coincides with yesterday’s highs, the rising trend line, and the 23.6% Fib level (when you draw from the lowe of January 16 to today’s high).

On the other hand, if XAUUSD manages to trade past today’s Asian session highs, we could see gold price trade higher to $1,578.25. This price served as resistance back in early January.

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