Gold keeps the red below $1950 level
|- Gold extended the previous day’s post-FOMC pullback from two-week tops.
- The risk-off mood underpinned safe-haven assets and helped limit losses.
- The USD struggled to preserve early gains and further extended support.
Gold maintained its offered tone through the mid-European session and dropped to over one-week lows, around the $1937 region in the last hour, albeit quickly recovered a bit thereafter.
The previous metal witnessed some selling on Thursday and extended the previous day's post-FOMC retracement slide from two-week tops, around the $1974 region. The fact that the Fed gave no indications of additional stimulus turned out to be one of the key factors that undermined the non-yielding yellow metal.
Adding to this, the Fed's upbeat assessment of the economic recovery prompted some aggressive US dollar short-covering move. The USD recovery prolonged through the first half of the trading action on Thursday, which, in turn, exerted some additional pressure on the dollar-denominated commodity and contributed to the early weakness.
The greenback, however, struggled to preserve its early gains and was last seen consolidated in the neutral territory. This coupled with a fresh wave of the global risk-aversion trade – as depicted by a weaker tone surrounding the equity markets – extended some support to the precious metal's safe-haven status and helped limit deeper losses.
Market participants now look forward to the US economic docket, highlighting the release of Philly Fed Manufacturing Index, Initial Weekly Jobless Claims and housing market data – Building Permits and Housing Starts. This, along with the broader market risk sentiment will assist traders to grab some short-term opportunities.
Technical levels to watch
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