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New COVID-19 variant sends gold higher

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(Kitco News) - The price of gold has pushed higher this morning after it was reported overnight that a new coronavirus variant. B.1.1.529 has been identified in South Africa. The stock markets have a setback too as the Nikkei 225 (-2.53%), ASX (-1.73%), and Shanghai Composite (-0.56%) all dropped heavily overnight.

Scientists are said to be worried about a high number of mutations in its spike protein. Those spikes play a big role in how the virus enters the body, and are also the feature targeted by vaccines. Scientists are trying to work out if it's more infectious or deadly than other variants, but governments aren't taking any chances. The U.K. has banned flights from six countries in southern Africa. Still, the variant has already been found in travelers arriving in Hong Kong.

It's anyone's game for gold next week as prices remain below $1,800

In the U.K. Whitehall sources said the B.1.1.529 variant, which is feared to be more transmissible and has the potential to evade immunity, posed "a potentially significant threat to the vaccine program which we have to protect at all costs".

looking at the price of gold on the daily chart below, it is clear to see the price has bounced off a significant support area and broken back through the $1800/oz psychological resistance. It is too early to indicate how much power is behind this move but upside resistance zones must be in focus. The previous broken trendline could come into play again and beyond that, there is a green shaded resistance close to $1835/oz that must be watched.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.