Gold eases from multi-year tops, still well bid near $1380 level
|- Fed opened doors for a rate cut later this year and triggers some aggressive buying.
- Tumbling US bond yields/prevalent USD bearish pressure remained supportive.
- Bullish equities seemed to be the only factor capping gains amid overbought conditions.
Gold built on the post-FOMC upsurge and rallied to near six-year tops during the Asian session on Thursday, albeit retreated a bit thereafter.
The Fed on Wednesday left key interest rates unchanged but kept the door open for an interest rate cut by the end of this year. The US 10-year Treasury bond yield dropped below the 2.0% mark in reaction to dovish FOMC commentary and benefitted the non-yielding yellow metal.
Meanwhile, the latest leg of a free fall in the US Treasury bond yields triggered some aggressive US Dollar selling pressure and provided an additional boost to the dollar-denominated commodity and collaborated to the ongoing strong positive momentum to the highest level since September 2013.
Adding to this, possibilities of some aggressive stops being triggered on a sustained move beyond last week's swing high, around the $1358 region, further aggravated the move during the Asian session on Thursday and lifted the commodity closer to the key $1400 psychological mark.
However, the prevailing risk-on mood, as depicted by bullish trading sentiment across European bourses and indications of a strong opening in the US equity markets, weighed on the precious metal's relative safe-haven status and seemed to be the only factor capping gains.
It would now be interesting to see if the commodity is able to attract some fresh dip-buying interest or traders opt to take some profits off the table amid near-term overbought conditions and renewed optimism over a possible resolution to the prolonged US-China trade disputes.
Technical levels to watch
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.