Gold advances beyond $1,510 as risk-aversion takes control of markets


  • 10-year US Treasury bond yield falls nearly 4% on Wednesday.
  • Wall Street opens day deep in negative territory. 
  • US Dollar Index fluctuates in narrow daily range. 

The precious metal lost value in USD terms on Tuesday after the positive developments surrounding the US-China trade talks triggered risk-on flows. However, disappointing data releases from China and the US 10-year and 2-year Treasury bond yield curves' inversion today caused the market sentiment to turn sour and supported the safe-haven gold. As of writing, the XAU/USD pair is trading at $1,514.50, gaining 0.87% on a daily basis.

The National Bureau of Statistics of China on Wednesday reported that retail sales in July rose 7.6% on a yearly basis to miss the market expectation of 8.6%. Additionally, industrial production in July expanded by 4.8% and fell short of analysts' estimate of 5.8%.

Meanwhile, the 10-year US Treasury bond yield lost nearly 4% on the day and fell below the 2-year bond yield for the first time in more than ten years and is believed to signal an upcoming recession. 

US-China trade optimism fades on Wednesday

Although the US announced its decision to postpone additional tariffs on some Chinese imports, the latest headlines suggest that this move was not necessarily a step toward a trade agreement. In fact, US Commerce Secretary Ross during an interview with CNBC today said it was premature to see where sides were in trade talks and added that the data for the next round of face-to-face talks had not been set yet.

Reflecting the sour market sentiment, Wall Street opened the day with heavy losses. Minutes after the opening bell, the Dow Jones Industrial Average was down 1.22% on the day while the S&P 500 and the Nasdaq Composite were losing 1.45% and 1.75%, respectively.

Technical levels to watch for

XAU/USD

Overview
Today last price 1514.58
Today Daily Change 13.13
Today Daily Change % 0.87
Today daily open 1501.45
 
Trends
Daily SMA20 1450.31
Daily SMA50 1409.62
Daily SMA100 1348.74
Daily SMA200 1312.57
Levels
Previous Daily High 1534.4
Previous Daily Low 1481
Previous Weekly High 1510.16
Previous Weekly Low 1436.96
Previous Monthly High 1452.72
Previous Monthly Low 1382.02
Daily Fibonacci 38.2% 1501.4
Daily Fibonacci 61.8% 1514
Daily Pivot Point S1 1476.83
Daily Pivot Point S2 1452.21
Daily Pivot Point S3 1423.43
Daily Pivot Point R1 1530.24
Daily Pivot Point R2 1559.02
Daily Pivot Point R3 1583.64

 

 

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