Gold surrenders early gains, back near $1640 level despite coronavirus-led jitters

• Gold struggled to build on its Asian session positive move to $1650 level.
• The downside seemed limited amid a rush to traditional safe-haven assets.

Gold failed to capitalize on the early uptick and witnessed a modest intraday pullback, albeit has managed to hold above one-week lows set early this Thursday

Another brutal selloff across the global equity markets – amid growing fears over the coronavirus outbreak – provided some early boost to the precious metal's perceived safe-haven status.

The market rout followed a move by the World Health Organization to declare COVID-19 a pandemic and the US President Donald Trump's announcement to suspend all travel from Europe for 30 days.

The early uptick, however, lacked any strong bullish conviction and quickly ran out of the steam near the $1650 region amid renewed optimism over a fiscal stimulus package by Trump administration.

It is worth reporting that Democrats in the US House of Representatives on Wednesday unveiled a broad package of proposals to help Americans affected by the coronavirus outbreak.

Meanwhile, the anti-risk flows led to a fresh leg down in the US Treasury bond yields, which kept the US dollar bulls on the defensive and extended some support to the non-yielding yellow metal.

Market participants now look forward to the ECB monetary policy decision, which might influence the USD and produce some trading opportunities around the dollar-denominated commodity.

Technical levels to watch