Gold Price Analysis: Climbs above $1,670 as USD weakens on Fed announcement
|- Fed takes new actions to provide $2.3 trillion in loans to support the economy.
- US Dollar Index drops below 100 in the early American session.
- Wall Street's main indexes look to open the day in the positive territory.
The greenback came under renewed selling pressure in the early trading hours of the American session after the US Federal Reserve announced that it has taken additional actions to provide up to $2.3 trillion in loans to support the economy.
The improving market sentiment and a weaker USD allowed the XAU/USD pair to gain traction. As of writing, the pair was up 1.85%, or $30, on a daily basis at $1,675.
DXY drops below 100
The Fed said that it will assist households and employers of all sizes as well as state and local governments and noted that it will purchase up to $600 billion in loans through the Main Street Lending Program. After spending the majority of the day moving sideways in a tight range above the 100 handle, the US Dollar Index (DXY) lost its traction and was last seen erasing 0.4% on the day at 99.75.
Moreover, US stock index futures turned positive on the day to suggest that risk flows are returning to markets.
Meanwhile, the weekly data published by the US Department of Labor revealed that 6.6 million American applied for unemployment benefits during the week ending April 4th. However, this data was largely ignored by the market participants. Later in the session, FINC Chairman Powell will be delivering his remarks on the economic outlook and the University of Michigan will publish the preliminary Consumer Sentiment Index data for April.
Technical levels to watch for
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