We think gold prices declined earlier in the week because of the virus outbreak. In other words, it would appear as if global anxiety has yet to reach a high enough level to attract safe-haven buying of gold off the idea of a major economic/health-related debacle.

Therefore it appeared as if the gold market initially adopted deflationary fear from the crisis. However, the dollar is slightly higher early today and both Hong Kong and Shanghai gold markets closed lower for the day.

On the other hand, the gold market was presented with news that gold producer Antofagasta PLC saw its 4th quarter gold production decline relative to the prior quarter.

Going forward it would appear as if the April gold contract is capable of extending its recent sideways consolidation which has been mostly above $1550 and is limited by resistance up at $1574.80.

In retrospect, long term traders should keep in mind that the May through August and the December through early January rallies seemed to be fostered by improvements in the economy and therefore the backbone of any further extension of the bull-run would seem come from conditions that foster improvements in physical demand in India and China.

The bulls might also need renewed ETF buying by smaller traders and funds.

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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.