Gold erases more than $10 on Thursday, continues to trade above critical $1400
|- Surging US T-bond yields weigh on safe havens on Thursday.
- US Dollar Index retraces early losses, looks to close in green.
- Coming up on Friday: US second-quarter GDP growth.
European Central Bank President Draghi's neutral tone today forced the precious metal, which in the last few weeks capitalized on expectations of major central banks turning dovish amid the dismal global economic outlook, to weaken against major currencies and caused the XAU/USD pair to erase more than $10 on the day. As of writing, the XAU/USD pair was trading at $1415, down 0.75% on the day.
Despite the recent disappointing data from the euro area, ECB President Draghi today said that the Governing Council has not discussed a rate cut at the monetary policy meeting and added that they will assess the next batch of hard data before making a policy change.
Rising US T-bond yields and upbeat data support USD
On the other hand, the Durable Goods Orders data published by the US Census Bureau, which is seen as a reliable gauge of economic health, rebounded decisively in June by expanding 2% on a monthly basis following May's contraction of 2.3% and surpassed the market expectation of 0.7%. Following a dip to a session low of 97.50, the US Dollar Index staged a U-turn during the American trading hours and was last seen adding 0.15% on the day at 97.80.
In addition to the USD's recovery, a more-than-1.5% increase seen in the US Treasury bond yield provided an additional boost to the pair.
On Friday, markets will be paying close attention to the first estimate of the second-quarter GDP growth data published by the US Bureau of Economic Analysis. Previewing the data, "We expect GDP to advance a near-trend 2.0% q/q saar in Q2, down from a strong 3.1% print in Q1," TD Securities analysts said.
"Unlike the prior quarter, we expect consumer spending to be a key engine of growth, rebounding to about 4% after a wobbly start to the year. Business investment, however, continued to slow due to heightened uncertainty while inventories and net exports were likely a drag on growth."
Technical levels to watch for
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.