Gold inches higher above $1,500 as US T-bond yields continue to slide
|- 10-year US Treasury bond yield erases more than 2%.
- US Dollar Index stays in the negative territory.
- Wall Street's main indexes open modestly higher on Thursday.
The troy ounce of the precious metal didn't have a difficult time recovering yesterday's losses but continues to trade in its weekly range and doesn't give any signals of a breakout in the near-term. As of writing, the XAU/USD pair was up 0.6% on the day near $1,503.
FOMC fails to boost the USD
Yesterday, the Federal Reserve announced that it lowered the federal funds rate by 25 basis points to 1.75% - 2% range as expected. Although the initial market reaction lifted the US Dollar Index above 98.60, the Greenback struggled to preserve its strength amid the lack of certainty regarding the timing of the Fed's next policy move.
Assessing the monetary policy statement and FOMC Chairman Powell's remarks, “We didn’t learn much from today's press release or press conference," said Nordea Markets analysts.
"The evolvement of the US economy and risk picture will determine how many more cuts will potentially follow. We still think the economy will slow more than what the Fed forecast (but don’t pencil in a recession). Therefore, we still see two more cuts down the road.”
Meanwhile, despite some optimistic comments from White House officials on the upcoming high-level US-China trade talks next month, the market sentiment remains struggles to recover with the 10-year US Treasury bond yield losing around 2.5% on the day and helping the safe-haven gold cling to its gains in USD terms. Regardless of the poor performance of T-bond yield, major equity indexes in the US opened the day modestly higher to deliver a mixed-signal regarding the risk perception.
Technical levels to watch for
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