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On Tuesday,  gold prices continue the upsurge despite risk recovery in the global financial markets. Having opened the day below the $1,5600 mark, gold rallied to the $1600 region. Bulls seem to have strengthened their positions and taken the lead as the precious metal trades with solid daily gains.

Yesterday evening, the Fed announced the launch of the unlimited QE program explaining that ‘aggressive measures’ are necessary to mitigate the negative coronavirus impact on the economy. The US Central Bank said that it would purchase an unlimited amount of the US Treasuries and securities to stabilize regular market functioning and ensure successful ‘transmission of monetary policy’. Previously, the Federal Reserve had a $700bln limit for asset purchases. It also started several lending programs worth $300bln to help financial markets. In response, the DXY lost ground, receded to the 102.10 region and then breached the 102.00 mark. Amid the weak USD, the gold stepped up its rally.

Moreover, the precious metal seemed to ignore risk reset on markets that are slowly recovering from the coronavirus shock and going back to normal. And though the UK’s Prime Minister Johnson issued a strict stay-at-home order preventing people from leaving their homes but for ‘a very few reasons’ to curb the pandemic spread while the situation in Italy is far from improving, traders didn’t pay much attention to these headlines as the Fed decision stole the show.

Further, in the NA docket, the US will publish its Markit PMI numbers that may somehow influence the USD dynamics. However, it’s becoming more and more evident that the epidemic has already impacted the global economy thus the data will likely be below previous readings.

From the technical point of view, the precious metal trades near 1.5-week tops and has been challenging the $1,600 region. Yesterday, it breached the SMA200 ($1531) on the 1-hour chart and has already taken hold above this level. The resistance is marked at $1663, $1672 and $1700 while the immediate support lies at $1560.

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