Gold corrects from 1-month tops, downside seems limited

   •  Improving risk-sentiment prompts some profit-taking during the Asian session.
   •  Subdued USD price action lends some support and might help limit the downside.

Gold witnessed some profit-taking move on Tuesday and eroded a part of the previous session's strong up-move to near one-month tops.

The overnight uptick was supported by an inversion of the 3-month and 10-year Treasury yields for the first time since 2007, which sparked fears of a potential US recession and underpinned the precious metal's relative safe-haven demand. 

Bulls, however, failed to capitalize on the positive momentum, rather opted to take some profits off the table during the Asian session amid some initial signs of stability in the global financial markets and recovery in other riskier assets - like equities.

Meanwhile, a subdued US Dollar price action extended some support to the dollar-denominated commodity. This coupled with the ongoing Brexit drama and uncertainties over the US-China trade negotiations might further collaborate towards limiting any sharp corrective slide. 

Hence, it would be prudent to wait for a strong follow-through selling before confirming that the commodity might have topped out in the near-term and traders start positioning for any further near-term depreciating move for the commodity.

Today's US economic docket, featuring the release of housing market data - housing starts and building permits, followed by the Conference Board's Consumer Confidence Index will now be looked upon for some short-term trading opportunities. 

Technical levels to watch

Immediate support is pegged near the $1315-14 region, below which the commodity is likely to correct further towards $1309 horizontal level en-route the key $1300 psychological mark. On the flip side, the $1321-22 area now seems to have emerged as an immediate hurdle, which if cleared should lift the metal further towards its next major supply zone near the $1329-30 region.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD steady around 1.1240 in ultra-thin holiday's trading

The EUR/USD pair bounced some 20 pips from its weekly low during the Asian session, now mute around 1.1240 with most market's off today. Softer-than-expected US housing data passed unnoticed.


GBP/USD battling around 1.3000

The GBP/USD pair is heading nowhere fast after bottoming for the week at 1.2978, amid lack of progress in Brexit negotiations.  Encouraging UK data failed to trigger Pound's demand.


USD/JPY: On track to close in the middle of its 50-pip weekly range below 112

The USD/JPY pair remains frozen below the 112 handle in the NA session and there is no reason for it to make a meaningful move as investors are already enjoying the Easter holiday.


The Tale of the Prosperous Consumer-US Retail Sales

American consumers asserted the right to spend in a grand fashion in March boosting retail sales to the fastest expansion in 18 months as the booming job market put the shutdown marked holiday season to rest.

Read more

Gold Forecast: Eyes 8-month rising trendline after weakest weekly close since December

The troy ounce of the precious metal lost around $17 this week and now looks to record its lowest weekly close since the end of December near $1275.

Gold News