- Gold gained some positive traction on Friday and moved away from one-month lows.
- A subdued USD price action, weaker risk sentiment remained supportive of the uptick.
- The set-up supports prospects for additional weakness and warrants caution for bulls.
Gold traded with a mild positive bias through the first half of the European session, albeit lacked any follow-through and was seen oscillating in a range just above the $1870 level.
A combination of supporting factors assisted the precious metal to gain some positive traction on the last trading day of the week and move away from one-month lows set in the previous session. The US dollar bulls refrained from placing fresh bets amid the uncertainty over the outcome of the US presidential election. This, in turn, was seen as one of the key factors lending some support to the dollar-denominated commodity.
Apart from this, concerns about the economic fallout from new restrictions to curb the second wave of the coronavirus infections weighed on investors' sentiment and drove some haven flows towards the XAU/USD. The risk-off mood was evident from a fresh leg down in the US equity futures and reinforced by sliding US Treasury bond yields, which further benefitted the non-yielding yellow metal and remained supportive of the uptick.
Despite the supporting factors, the XAU/USD lacked any strong bullish conviction and remained well within the previous day's broader trading range. Even from a technical perspective, the overnight fall added credence to this week's bearish break below 100-day SMA – for the first time since March. This warrants some caution for aggressive bullish traders and positioning for any meaningful near-term appreciating move for the commodity.
Moving ahead, market participants now look forward to the second-tier US economic releases – Core PCE Price Index, Chicago PMI and revised Michigan Consumer Sentiment. The data, along with the broader market risk sentiment, will influence the USD price dynamics and produce some meaningful trading opportunities on the last day of the week.
Technical levels to watch
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
GBP/USD resumes upside toward 1.3300 ahead of BoE rate call
The GBP/USD gains traction and approaches 1.3300 in European trading on Thursday, having found buyers near 1.3150. A broad US Dollar pullback and a rebound in risk sentiment offer support to the pair ahead of the BoE policy announcements.
EUR/USD rises further toward 1.1200, focus shifts to ECB-speak
EUR/USD stays strongly bid toward 1.1200 in the European session on Thursday. The pair capitalizes on a renewed US Dollar retreat and an upbeat mood. Traders digest the Fed's dovish outlook, bracing for ECB-speak for fresh trading incentives. US data are also eyed.
Gold hovers close to new high of $2,600 after Fed meeting
Gold (XAU/USD) edges higher and trades back in the $2,580s on Thursday after falling to the $2,540s following the US Federal Reserve (Fed) decision on interest rates the prior day.
BoE expected to keep interest rate unchanged at 5% as price pressures persist
After a close call in August, the Bank of England’s September interest rate decision is keenly awaited for fresh cues on the bank’s future policy action and the pace of its bond sales.
Solana announces details of Seeker, second mobile device after Saga phone
Solana Lab’s second phone, Seeker, is set to launch in 2025. At Token2049, a global conference for crypto, Solana’s General Manager Emmett Hollyer said that the new mobile would be a “rewards magnet” for its users.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.