Gold Price Analysis: A test of $1,600/oz looks likely

• Prices of the yellow metal extend the downside on Thursday.
• Markets’ attention remains on the impact of the COVID-19.

Prices of the ounce troy of the yellow metal are now well into the defensive territory and threaten to challenge the key support at the $1,600 mark if the selling bias accelerates.

Gold weaker ahead of ECB, looks to coronavirus

Prices of the precious metal are down for the third consecutive session on Thursday amidst the continuation of the modest recovery in the greenback, which has so far motivated the US Dollar Index to regain the vicinity of the 97.00 level.

The sentiment around gold has been deteriorating in past sessions despite rising speculations that the Federal Reserve could reduce the FFTR by another 50 bps at the March 17-18 meeting. Further easing measures by the BoE, the RBA and the BoC appears to have made no impact on the metal, while concerns surrounding the coronavirus remain well on the rise.

In addition, US yields remain well depressed so far, with the 10-year reference once again falling below the 0.80% area ahead of the opening bell in Wal St along with futures of the S&P500 signalling a negative start of the day for equities.

Gold key levels

As of writing Gold is losing 0.54% at $1,625.58 and faces the next support at $1,608.25 (38.2% Fibo of the December-March rally) seconded by $1,617.09 (monthly low Mar.12) and finally $1,583.85 (55-day SMA). On the other hand, a breakout of $1,689.30 (monthly high Feb.24) would expose $1,703.60 (2020 high Mar.9) and then $1,723.30 (monthly high December 2012).