Gold: Bearish pressures mounting – OCBC

FXStreet Team FXStreet

Gold is likely to face further downside pressure, especially if the dollar continues to firm, Howie Lee, Economist at OCBC Bank, reports. XAU/USD has started the week trading listless around $1860.

Key quotes

“Gold broke below $1900/oz last week and bulls have not shown any inclination to buy on dips despite prices being at a two-month low.”

“With the dollar expected to continue strengthening in the current risk-off environment, the inverse correlation between gold and the dollar may push gold further down in the immediate future.”

“Longer-term,we remain bullish on gold.”

Author

FXStreet Team

FXStreet

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.