Gold: $1266/65 remains on sellers’ radar as USD strength weighs over risk aversion


  • 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.

Technical Analysis

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

EUR/USD hovers around 1.0850 ahead of Eurogroup meeting, US data

EUR/USD is trading around 1.0850 as tensions mount ahead of the Eurogroup meetings which have previously ended in acrimony. US jobless claims, consumer confidence, and Fed Chair Powell's speech are all eyed. 

EUR/USD News

GBP/USD trades around 1.24 after as Johnson's condition, US data eyed

GBP/USD is trading around 1.24, consolidating its gains as UK monthly GDP disappoints with -0.1% in February. PM Johnson's condition is stable, but he remains in intensive care. US jobless claims, consumer confidence, and Powell's speech are awaited.

GBP/USD News

Crypto market shifting to the hyperspace

The typical pattern expects the participation of second-line Altcoins, such as Litecoin or Ethereum Classic. The current phase can cause occasional periods with a strong increase in volatility. The bulls have the advantage over the bears, but they don't yet have market control.

Read more

WTI consolidates the upside near $26 amid imminent OPEC+ output cuts

WTI (oil futures on NYMEX) is consolidating the advance to a new two-day high of 26.66, as the bulls take a breather the recent bounce back from near 25.60 region. At the press time, the US oil trades at 26.05, still up 3.80% so far.

Oil News

Gold: Recovery rally weakens demand for put options

Gold has gained significant ground over the last couple of weeks. The yellow metal bottomed out near $1,515 on March 20 and was last seen trading near $1,650 per ounce, representing a 0.38% gain on the day. Prices hit a high of $1,678 on Tuesday. 

Gold News

Forex MAJORS

Cryptocurrencies

Signatures