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Gold declines after record weekly growth

During Asian trading session, the price of gold decreased after last week's strongest growth since 2008. Therefore, many experts associate the local decrease in the cost of precious metals mainly with the influence of technical factors, rather than fundamental news. Some speculative investors began  to close long positions after a record weekly growth.

It is noteworthy that on Monday, gold again shows a direct correlation with the movement of stock indices. Asian markets closed mainly in the red zone, as the COVID-19 pandemic still shows no signs of weakening.

Despite the decline today, in the medium term, gold has good opportunities for further growth. Investors see precious metals as the main defensive asset in the worsening situation in the global economy.

Disruptions in the physical supply of gold due to quarantine imposed in many countries of the world can have a positive effect on precious metals. On Friday, a South African company, Rand, announced the termination of the supply of gold bullion to London due to the lack of commercial flights.

There is no important news in the economic calendar today. February US pending home sales data is likely to have a very restrained effect on the market. Now, investors are primarily paying attention to the March statistics, which reflects the impact of the coronavirus pandemic on the economic situation in the United States.

On the chart, the situation has not changed significantly. After a double unsuccessful resistance test at 1635.00, the precious metal resumed its downward movement. Today we assume a further decline in quotations to support zone at 1590.00.

Resistance Levels: 1635.00, 1680.00, 1700.00;

Support Levels: 1590.00, 1545.00, 1515.00.

The main scenario is a decline to 1590.00 and the resumption of upward movement.

An alternative scenario is a breakdown of resistance at 1635.00 and an increase in the direction of 1680.00.

The fundamental background is neutral. On the chart, bearish signals prevail locally. Inside the day, we are looking for shorts near the level of 1635.00.

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