- Gold falls for the fourth straight session on Thursday, eyes on $1850.
- Spiking covid cases, new restrictions globally down vaccine excitement.
- US dollar to cheer risk-aversion, hourly chart points to more losses.
Gold (XAU/USD) once again witnessed a good two-way price action on Wednesday but remained trapped in the $20 range, well below $1900. During the first half of the day, the yellow metal fell as low as $1864 after Pfizer and BioNtech came out with reports that the covid vaccine has shown 95% efficacy in its third phase final trial. However, the excitement was soon doused by the fresh coronavirus statistics from the US, revealing that the new infections and hospitalizations continue to surge. Amid the covid growth, new shutdowns and restrictive measures were announced in the US cities. Wall Street indices turned south and lifted the haven demand for the greenback, which kept the bearish pressure intact on the gold. However, the fall in the US Treasury yields, in the face of the economic growth concerns, offered temporary reprieve to the gold bulls before the price slipped back below $1870 into the closing.
Looking ahead, gold remains exposed to downside risks, as the risk-aversion on the global markets could deepen and revive the dollar’s recovery momentum, as investors take note of the new shutdowns worldwide and its likely impact on the global economic recovery. Also, the vaccine optimism seemingly faded, as its dissemination is seen unlikely before Spring 2021. The US docket highlights the Philly Fed Manufacturing Index, although the covid data will likely hog the limelight.
Gold: Short-term technical outlook
Hourly chart
As observed in the hourly chart, gold has confirmed a rising channel breakdown on the hourly chart and looks to extend the downside, as the price trades below all the major hourly moving averages (HMA).
The hourly Relative Strength Index (RSI) holds in the bearish region but above the oversold territory, suggesting that there is more room to the downside.
Therefore, a test of the measured target $1822 cannot be ruled out in the coming days should the bulls fail to defend the crucial $1850/49 support area. That level is the confluence of the September month low and November 9 low.
On the flip side, recapturing the $1873 barrier, the intersection of the bearish 21-HMA and the pattern support now resistance, is critical for the recovery to gain traction.
Further up, strong resistance awaits at $1884, which is the convergence of the 100 and 200-HMAs.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter GDP data.