Gold holds steady above $1700 mark, lacks follow-through
|- Gold attracts some buying near 50-DMA support amid escalating US-China tensions.
- A goodish pickup in the USD demand kept a lid on any strong gains for the metal.
- Investors now eye US jobless claims for some impetus ahead of Friday’s NFP report.
Gold edged higher on Thursday and moved back above the $1700 mark, recovering a part of the overnight sharp fall to near four-week lows.
The safe-haven commodity managed to find some support near 50-day SMA, around the $1690 region and gained some positive traction on Thursday amid concerns over worsening US-China relations. The US suspended Chinese airlines passenger flights to and from the US with effect from June 16. The move came after the dragon nation earlier barred American carriers from re-entering China.
The latest developments fueled worries about a further escalation in tensions between the world's two largest economies and kept a lid on the recent optimism over a sharp V-shaped recovery for the global economy. This, in turn, extended some support to the precious metal's perceived safe-haven status, albeit a goodish pickup in the US dollar demand capped any meaningful gains.
The greenback was back in demand on Thursday, allowing the key USD Index to stage a notable bounce from the lowest level since mid-March. Stronger USD turned out to be one of the key factors that held investors from placing any aggressive bullish bets around the dollar-denominated commodity.
Even from a technical perspective, the overnight downfall dragged the yellow metal below support marked by a short-term ascending trend-channel extending from mid-April. Hence, the attempted recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.
Market participants now look forward to the Initial Weekly Jobless Claims data from the US, which might influence the USD price dynamics and produce some short-term trading opportunities. The key focus, however, will be on Friday's release of the closely watched US monthly jobs report, popularly known as NFP.
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.