Gold consolidates the 1.2% surge from overnight
|- Gold prices consolidate the rally from overnight, trading at $1425 currently, below the $1,430 high.
- Technically, a symmetrical triangle is taking shape, with price progressing towards a breakout one way or the other.
Gold prices ended sharply higher on in New York while the U.S. dollar ended lower by 0.2% at 97.209 while the 10-year Treasury note fell which contributed to the precious metals surge to a six-year high. US 2-year treasury yields fell from 1.86% to 1.83%, while 10-year yields fell from 2.11% to 2.05%.
Investors continue to price in a Federal Reserve cut for this month while the Federal Reserve’s Beige Book said that the US economy had grown at just a “modest” pace as indicated in the last survey. Markets increased their pricing to 33bp of easing at the 31 July meeting vs yesterday's 31bp. Most of the leg work was done in European trade and August gold trading on Comex added $12.10, or 0.9%, to settle at $1,423.30 an ounce, after losing 0.2% lower Tuesday. Trade uncertainty continues to weigh and earnings reports sent mixed signals on the state of the US economy. US housing data also arrived soft for June with housing starts falling 0.9% m/m (mkt: -0.7%, last: -0.4%) and building permits down 6.1% m/m (mkt: +0.1%, last: +0.7%).
Gold levels
Technically, a symmetrical triangle is taking shape, but it is still early days and indicats a break out is in the making. A break of the resistance opens the 1440 objective. On the flip side, below 1420. bears will look for a run below the 1400 psychological level. The 23.6% Fibo of the latest swing lows and highs are located at 1398. Below here, we are looking down the barrel at $1,373/76 zone which meets the 19th June spike correction lows and the 38.2% Fibo of the same swing ranges. On the flipside, 1427, 1439 come in as key targets.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.