• Gold has been under pressure since peaking at the start of the week. 
• Gold is close to filling the opening gap as per the analysis below. 
• Gold is underpinned, however, by the uncertainty in markets on trade and the coronavirus.

Traders piled into the precious metal at the start of the week, but the bulls have not been able to hold on and non-committed bulls are cashing in with a solid US dollar doing some of the hard work for the gold bears as well. 

"While the safe-haven bid is likely to be short-lived, we argue that the global reflation trade will continue to provide a bid in the yellow metal, as capital seeks shelter from negative real rates, particularly as the year progresses," analysts at TD Securities explained, adding, "In the near-term, however, this week's FOMC will capture the market's attention."

Fed on pause

The Fed is expected to start on hold and the dots show there will be no adjustments for the year. However, we are a long way from then and even a month in these market conditions is a long time. The virus is a huge threat to he markets stability as there are signs that this is like no other virus the human race has faced before, the contagion risks are frightening and we are waiting for confirmations one way or another as to the development and like course of trajectory this will be taking in the near-medium term.

Coronavirus could be much more contagious than previously thought – The Hill

"We suspect the meeting may quell any lingering concerns that the Fed will be looking to take back its cuts any time soon, but the Fed's guidance on support in repos will also be closely watched," the analysts argued with respect to the Fed.

Additionally, the bond market should be monitored. The risks of a slower recovery in global growth are coming back to the fore and the US bond markets are telling us that, progressively suggesting more risk-averse positioning will be on the cards. It will be worth keeping an eye on the yen along with a drop to 108.50 where support meets the 200-Day moving average. 

"Further, while we don't expect much CTA flow in the complex in the near-term, we expect continued buying flow in treasuries which could help precious metals as rates are pressured," analysts at TD Securities argued. 

Gold levels

Gold Price Analysis: Bears seek 5-wave correction to 61.8% Fibo retracement