- Gold prices hold onto recovery gains from Thursday’s low of $1,717.34.
- Risk aversion remains present amid US-China tussle, virus woes.
- Uncertainty over the equities’ future also favors the safe-havens.
- Comments from China’s National People's Congress can offer immediate direction.
Gold prices extend pullback from a one-week low of $1,717.34, flashed the previous day, to currently around $1,727.40 during Friday’s Asian session. Although the US dollar recovery seems to cap the yellow metal’s rise, escalation of the US-China tussle and the coronavirus (COVID-19) keep the bullion’s safe-haven demand intact.
Following China’s indirect warning to the US, from the 13th National People's Congress, the tussle between the world’s top two economies intensified while including the Hong Kong issue as an additional point.
While diplomats from the dragon nation stand ready to counter any interference in their “personal” issues and/or allegations for the virus outbreak, US policymakers refrain to step back. Recently, the US Senate Majority Leader McConnell said that further China crackdown on Hong Kong will intensify the Senate’s interest in re-examining the US-China relationship.
On a different note, the Asian major dropped its economic growth target, 6-6.5% for GDP in 2019, during the report to the National People's Congress, as per the Bloomberg. This increases the market’s uncertainty and suggests that the dragon nation was fearing much disappointment from the GDP, which in turn supports the safe-haven demand of the metal.
Elsewhere, the virus wave 2.0 is also challenging the global policymakers to rethink their decision to restart the economies. However, US President Donald Trump recently said he will not shut down the economy during the second round of the virus.
Amid all these catalysts, the US 10-year Treasury yields stay down below 0.70% while Japan’s NIKKEI struggle for direction around 20,560 by the press time.
Considering the lack of major data/events on the economic calendar, except for the BOJ, the bullion traders may keep eyes on the qualitative catalysts for fresh direction.
Technical analysis
Failures to close below 21-day SMA level of $1,715 keeps the yellow metal directed towards the monthly top surrounding $1,765.40. Though, a downside break might not refrain from calling a sub-$1,700 area back to the chart.
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 trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800, as traders lack directional impetus amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold reaches to all-time highs near $2,230, US PCE eyed
Gold price appreciates to all-time highs near $2,230 per troy ounce, attempting to continue its winning streak for the fifth successive session on Friday. However, trading volumes are light as market participants are likely observing Good Friday.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.