- Counter-play of risk aversion and greenback upside confuses the bullion traders.
- Upside remains capped by 100-day SMA with current year low in the spotlight.
Despite the global risk-off sentiment, Gold prices refrain from rising and seesaw near $1278 during early Thursday.
The US Dollar (USD) strength can be considered as one of the reasons that might have contributed to the bullion’s latest inactivity. The underlying reason is the greenback’s negative correlation to the gold prices.
Trade disputes between the US and China have recently helped the USD as markets considered it the safe currency amid upbeat fundamentals.
Global risk tone weighed heavy yesterday as the benchmark US 10-year treasury yield slipped to the lowest since September 2017. However, the absence of new negatives from the US and China triggered the risk barometer’s pullback recently to 2.266%.
Moving on, the US first quarter (Q1) gross domestic product (GDP) data will be the key to watch in addition to observing the US-China news headlines. The GDP number is expected to soften to 3.1% from 3.2% on an annualized basis.
The sustained weakness of prices and a downward sloping 14-day relative strength index (RSI) indicate the precious metal’s further declines to $1272 and then to the $1266/65 are encompassing lows marked during April and May month. In the case of extended south-run below $1265, 200-day simple moving average (SMA) level of $1261 could be the key to watch.
Meanwhile, 100-day SMA level near $1297 limits the quote’s near-term upside, a break of which can propel prices past-$1300 towards $1307/08 region including current month high.
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.