This morning of Tuesday, February 18, 2020, the price of gold remains rather buy oriented according to the analysts of this market. However, one might have expected a more significant drop following yesterday's correction and because of concerns about the coronavirus and other events that we will discuss in more detail here.
The price of gold should therefore continue to rise during Tuesday's session and perhaps during the sessions to come this week. However, during yesterday's session, we had observed a slight decline in this value, which took the form of a simple correction with little volatility. This value therefore seems to be holding up well against traders' concerns regarding the coronavirus outbreak, or the Japanese results with growth well below expectations.
Another surprising element comes from the fact that European and Asian stock markets seem to be moving higher in Tuesday's trading session. This may be due to the Chinese government's announcement of new stimulus measures to support the economy, which boosted market sentiment and pushed up major stock market indices.
However, this significant rise in stock market indexes still had the effect of limiting gold's point gain. However, analysts remain confident about the short and medium-term trend of this asset, which remains fundamentally upwardly oriented. This continued bullish run may be explained by the fact that there is ample evidence of a global economic slowdown due to the Chinese virus, leading investors to be more cautious.
It should be noted that the governments of Thailand and Singapore have reduced their growth forecasts for the current year due to the impact of lower tourist arrivals from China. Japan, which also relies heavily on Chinese tourism, also said its economy contracted more than expected in the fourth quarter of 2019.
Let us now turn our attention to the technical analysis of this value by studying the various graphs more closely.
Looking at the current technical indicators, we can see first of all that the price of gold is benefiting from a short-term uptrend line towards $1,580.50 with a first hurdle at $1,583, then $1,585 and finally $1,586. Should a break above this level occur, gold is likely to receive further support.
In the event of a fall, the price of gold could fall back below $1,580.50 and then drop to $1578 and $1576.