Gold pulls back from fresh seven-year high to sub-$1670 area, coronavirus in focus

• Gold prices surge to the highest levels since March 2013.
• Increasing cases of coronavirus outside China have recently weighed on the market’s risk-tone.
• Updates concerning the epidemic will be the key to watch.

Gold prices rallied to $1,681.25, the highest since February 2013, during early Monday. The yellow metal recently benefited from the rise in the coronavirus cases outside China while no respite from the contagion inside the dragon nation earlier fuelled the safe-haven. It should be noted that the bullion’s prices have been pulled back to $1667.18 by the press time.

Read: What you need to know for the open: Coronavirus risk-off themes rule the waves

Coronavirus keeps fueling the yellow metal…

With the fears of China’s coronavirus taking a toll on the global economy, traders rush to risk-safety. The same has been pushing the yellow metal’s prices to multi-year tops off-late.

The latest cause of concern was a multi-fold rise in the numbers of coronavirus infected cases from Italy. As per the details, cases from Italy surged three on Friday morning to more than 130 by Sunday.

Even so, China’s President Xi Jinping and the World Health Organization (WHO) continues to try to placate traders by showing optimism that China will be able to tackle the epidemic.

However, the market’s risk-tone pays no attention to such news as S&P 500 Futures decline 1.24% to 3,297 by the press time.

Markets are too sensitive to the coronavirus headlines in recent days and hence any more fearsome news could keep the gold prices heading towards the north.

Technical Analysis

The yellow metal is now en-route to 2013 high surrounding $1,698 with March 2013 top nearing $1613 acting as the nearby support.