Gold has continued to decline, suffering against the strength of the US dollar and a general risk-on scenario. The spread of coronavirus, which has already killed more than 1,000 people in China, is having a mixed impact on gold. Of course, bullion can be seen as a safe haven (and investment demand could grow if the epidemic continues to spread), but there are more elements to be considered as the coronavirus will also have an impact on gold jewellery demand. Indeed, there are estimations that see a decline of 10-15% of Chinese jewellery demand in 2020.
From a technical point of view, the scenario remains unchanged. There is a strong support zone at $1,550 and a fall below that level could be seen as a signal of weakness, while $1,575 is now the first resistance level for the bullion price. Only a clear breakthrough of that zone could open space for a new rally to $1,600.
