Gold Price Analysis: XAU/USD bounces off intraday low as S&P 500 Futures gain over 1.0%
|- Gold prices fail to extend the previous day’s losses.
- Risk-tone recovers amid hopes of virus vaccine, reassessment of growth fears.
- US data might offer intermediate clues, qualitative catalysts to remain on the driver’s seat.
Gold prices extend recovery moves from $1,722.44, the intraday low, while trading around $1,727.70 ahead of the European session on Friday. The bullion seems to have taken clues from the recent recovery in the market’s trading sentiment. Also probing the previous day’s losses could be the absence of major catalysts which in turn pushes traders to reconfirm the previous bearish bias.
China’s clinical trials of the promising coronavirus (COVID-19) drug offer upbeat results on animals. As a result, traders recheck on the fears of virus resurgence, mainly driven by the increase in cases from the US and Asia. Even so, Australian Finance Minister Mathias Cormann warned that the second wave of coronavirus could cost the Australian economy $80 billion over the next two years, according to Australian Associated Press.
On the other hand, the US and Japan are keeping visa restrictions despite easing the lockdown restrictions. Furthermore, the Fed funds futures rekindle hopes of negative interest rates by the US central bank and guard the risk recovery.
Having said that, the US 10-year Treasury yields rise near five basis points from the monthly low to regain 0.70% threshold whereas the S&P 500 Futures add 1.0% to near 3,050 by the press time. Additionally, Japan’s Nikkei and stocks in China also recover the early-day losses while still being in mild losses of below 1.0%.
Looking forward, the US Michigan Consumer Sentiment Index for May, expected 75 versus 72.3 prior, might entertain the short-term traders during the US session. Though, an absence of major catalysts could keep the news/headlines as the key factors to look at.
Technical analysis
Sustained trading beyond $1,745, comprising the monthly top, becomes necessary for the bulls to aim for $1,754 and the previous month’s high near $1,765.40. Until then, odds favoring the bullion’s fall to sub-$1,700 area can’t be ruled out.
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