Gold remains depressed near session lows, around $1950 post-US GDP
|- A modest USD rebound from two-year lows prompted some profit-taking around gold.
- The US GDP collapsed 32.9% during the second quarter of 2020, albeit did little to influence.
- A steep fall in the US bond yields, weaker risk sentiment extended some support to the metal.
Gold maintained its offered tone near daily lows, around the $1950 region, and had a rather muted reaction to the US GDP report.
The precious metal witnessed some selling on Thursday and moved away from the previous day's all-time high, around the $1981 area retested in the aftermath of a dovish FOMC statement. A modest US dollar rebound from more than two-year lows was seen as one of the key factors that prompted some profit-taking around the dollar-denominated commodity.
Meanwhile, the USD bulls seemed rather unimpressed by Thursday's release of the advance Q2 GDP report, which showed that the US economy contracted by 32.9% annualize pace. A steep decline in the US Treasury bond yields, coupled with the impasse over the next round of the US fiscal stimulus measures kept a lid on any strong gains for the greenback. This, in turn, extended some support to the non-yielding yellow metal.
Apart from this, a sharp turnaround in the global risk sentiment – as depicted by heavy losses in the equity markets – further underpinned the precious metal's safe-haven status and helped limit any deeper losses, at least for now. Hence, it will be prudent to wait for some strong follow-through selling before confirming that the commodity might have already topped out.
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.