Gold Price Analysis: Dives over $20 as sell everything mode returns

• Gold bears are back as King dollar rules amid market turmoil.
• The USD index holds fort above 100 as Oil collapses 30%.
• Sell everything mode fails to cheer the ultimate safe-haven.

Gold prices (XAU/USD) gave away over $20 over the last hour, diving from near $1695 to $1671 levels, as the oil-price carnage resumed and paved the way for sell everything mode amid market unrest and panic.

At the press time, gold trades at 1678, still down 1% on the day.

Gold fails to shine, as oil plunge overshadows

The coronavirus crisis-driven global demand concerns weighed on oil prices while a lack of storage facilities also aggravated the downpour. With the global stocks crashing alongside, investors scurried up in the world’s reserve currency, the US dollar, as the ultimate safety bet. The European stocks are losing over 2.5% broadly while the US equity futures drop 1%.

The latest uptick in the US dollar across the board amid increased haven demand could be also associated with the slide in the yellow metal. The US dollar index popped to a new three-day high of 100.27, up nearly 0.30% so far.

Further, the oil-price sell-off diminishes gold’s appeal as a hedge against inflation, as the oil rout reinforces deflationary pressures worldwide.

Meanwhile, gold prices are expected to consolidate below recent highs during 2020 and 2021 as increased demand from investors for the safe-haven asset is offset by dollar strength and weak retail consumption, the latest Reuters poll showed on Tuesday.

Next of note remains the US Existing Home Sales data, which may have an influence on the dollar trades and therefore, on the precious metal.

Gold technical levels to watch