Gold prices have been on the defensive for a sixth day in a row on Monday. The precious metal has accelerated the decline today and reached the 200-daily moving average just below the $1,500 psychological level which stands as a critical support zone. Should this level give up, the prices may target fresh lows. By the way, the fact that the bullion has been challenging this important figure suggests the downside pressure may persist in the near term.
The precious metal is pressure despite the dollar started to retreat after decent gains last week. The safe-haven demand doesn’t help gold to attract demand amid the series of measures taken by global central banks, including the Federal Reserve that made another emergency rate cut, this time to the 0.00%-0.25% range. Still, the steps by the monetary authorities failed to lift market sentiment as investors continue to assess the consequences from the coronavirus outbreak that is yet to reach its peak.
As such, despite the current weakness, the precious metal may yet attract safe-haven demand in the medium term as investors seem to be unconvinced by the measures taken by the governments, especially as the disease continues to spread across the globe.
Moreover, the situation in the oil market may add to the lingering uncertainty in the markets. Brent is now below the $31 handle, and a break under the $30 handle may add to the panic as the OPEC+ technical committee meeting this week is said to be cancelled off.
In the immediate term, the metal may accelerate the bearish momentum if the $1,500 figure fail to hold. On the downside, the next support now arrives at $1,1491 and then at $1,1470. On the weekly timeframes, the technical picture looks neutral as long as the prices stay above $1,1440. On the upside, the bullion needs to regain the $1,535 region, where the 100-daily moving average arrives. As the daily RSI hasn’t entered the oversold territory yet, the sell-off may persist in the near term.