Gold remains positive above $1,700 as coronavirus propels risk aversion

• Gold trades near the highest since early-December 2012.
• Fears of coronavirus keep pushing traders to safe-havens.
• The White House diplomats anticipate COVID-19 cases to doubt or more in 48 hours.
• Fed widely expected to announce another rate cut in March.

With the risk aversion on its full stream, Gold prices refresh multi-month top to $1,703.40, currently at $1,699, amid the Asian session on Monday. While the rising fears of coronavirus outbreak in the US and Europe are taking a toll on the market’s risk-tone, increasing odds of the Fed’s rate cut also favor the yellow metal.

The Italian government is struggling with an immense increase in coronavirus (COVID-19) cases that led to the shutdown of borders connecting Lombardy. As per the latest release, the death toll rose from 233 to 366 by Monday.

On the other hand, the US policymakers cast doubts that the virus cases will double or more in the next 48 hours. This could be traced back to Friday’s comments from US Vice Preside Mike Pence who signaled the lack of testing kits.

Elsewhere, updates from Morgan Stanley suggest a 0.75% rate cut during the year 2020, 0.50% in March and 0.25% in April, coupled with a revised down GDP growth rate of 1.5% versus 1.8% previously forecast.

While portraying the risk-off, the US 10-year and 30-year treasury yields take rounds to the record lows whereas the US equity futures and stocks in Asia-Pacific are nearly 4 to 5% down by the press time.

Given the full-scale panic taking clues from the COVID-19 headlines, nothing else matters more than that for the market players to determine near-term trade directions.

Technical Analysis

While citing 1.618% Fibonacci extension level to the yellow metal’s swing, FXStreet’s Rajan Dhall anticipate gold prices to aim for $1,720 during further upside.