Coronavirus Containment Hope Slows Down Gold Rally

While the Gold Spot remained a strong safe haven in the past few days, signs of hope of the containment of the Coronavirus started slowing down the rally of the commodity. While the overall sentiment of Gold still remained on the up side, risk appetite became stronger in the market hitting the Gold Spot a little.

Stronger risk appetite was shown during the Asian session when the Asian equities and stock market were able to get positive gains for the second day in a row. Wall Street gains were also seen to have gains in light of the slowing of the virus in European countries such as Spain, Italy, and the United Kingdom.

Aside from overall market optimism, the possibility of a new cure has also driven the risk appetite of other investment mediums. Due to that, some bulls are starting to come out of hiding and diversifying their investments again.

The Dollar and Gold Relationship

Gold always had an inverse relationship with Gold. More often than not, a strong Dollar usually means a weak Gold and vice versa. That’s why a stronger Dollar due to the lessening of infections (although it may be too soon to tell if this will sustain) was able to halt the rise of Gold.

However, this doesn’t mean that Gold’s rally will reverse anytime soon. On the technical side, the area between $1700 to $1702 still remains a strong resistance level that is being targeted as of now. Only time will tell when it will reach its targeted level again. But for now, the rally is currently being slowed down at its current level.

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