Just as gold price was heading downward due to the diminishing coronavirus fears, U.S. President Donald Trump said on a Fox News interview China "made a horrible mistake" which caused the coronavirus pandemic, and "they tried to cover it". Meanwhile, Bloomberg reported that Trump is considering plans to block a government retirement fund from investing 50 billion dollars in China stock markets.
Some analysts are already pointing out that Trump could attempt to diverge attention to China's fault on coronavirus outbreak, as a 2020 presidential election strategy. If he carries on lighting up tensions between the two nations, gold may be benefited.
From a technical point of view, spot gold is gaining traction as shown on the 1-hour chart. It has broken above a falling wedge pattern, while the RSI has shown a bullish divergence. The level at $1,685 may be considered as the nearest support, and a break above the nearest resistance at $1,706 is likely to trigger a further advance to test the next resistance at $1,714. In an alternative scenario, losing $1,685 might show that gold has lost momentum and the next support at $1,671 could be threatened.
Source: TradingView, Gain Capital