Gold prices remain directed to $1,600, coronavirus, G7 call in focus

• Gold prices register mild gains amid cautious sentiment ahead of the key events.
• G7 calls to counter COVID-19 favor risk-on while the speedy rise in coronavirus cases challenge trade sentiment.
• RBA will also contribute to the market’s risk-tone.

Gold prices mark 0.46% gains while taking the bids to $1,593 amid the Asian session on Tuesday. The risk-tone remains light amid expectations of the global consolidated action to counter coronavirus (COVID-19). However, increases numbers of the cases as well as cautious ahead of the actual G7 meeting helps the yellow metal.

G7 policymakers will hold a conference call around 12:00 GMT, on Tuesday, counter the economic risks of the coronavirus that has recently spread at a faster pace in the US and Europe. The discussion will be led by the US Treasury Secretary Steve Mnuchin and the Fed Chair Jerome Powell.

While markets are anticipating a consolidated wave of rate cuts and fiscal stimulus following the call, US President Donald Trump used the opportunity to push the Fed towards rate cuts. Also increasing the hope for any such moves are the ECB’s latest statement that showed readiness to act as well as comments from Japan’s Finance Minister Taro Aso.

On the contrary, coronavirus cases in the US, the UK and Italy have flashed red signals off-late. Even so, policymakers at the US turn down the scope of any more danger while the UK PM Boris Johnson remains ready for potential economic downside due to the coronavirus.

That said, the market’s risk barometer keeps the recovery by the press time. The US 10-year treasury yields extend gains to 1.14% whereas S&P 500 Futures and Japan’s NIKKEI also register green signals by the time of writing.

Looking forward, the RBA’s monetary policy meeting will be the immediate catalysts as a rate cut, which was earlier not expected, will indicate the global policymakers’ readiness to accept the fears of COVID-19.

Technical Analysis

In addition to $1,600 round-figure, January month high near $1,611 and late-February lows surrounding $1,625 will also be the keys to watch. On the downside, 50-day SMA near $1,570 acts as immediate support.