• Bulls continue to struggle above $1240 level despite risk-off mood.
• A modest pickup in the USD demand prompts some fresh selling.
• Traders eye US macro data for some impetus ahead of Powell’s speech.
Gold reversed an early uptick to $1241 area and has now drifted into negative territory for the second consecutive session.
The Canadian arrest of the Chinese tech giant Huawei Technologies' global CFO reignited fears of a further escalation in tensions between China and the US and triggered a fresh wave of global risk-aversion trade.
The global flight to traditional safe-haven status provided a minor boost to the precious metal, though bulls failed to capitalize on the up-move and continued with their struggle to sustain/build on the positive momentum beyond $1240 level.
Meanwhile, the latest leg of a sudden fall over the past hour or so could further be attributed to a modest pickup in the US Dollar demand, which tends to dampen demand for the dollar-denominated commodity.
However, an inversion of the short end of the US Treasury yield curve, signalling an impending recession, extended some support to the non-yielding yellow metal and might continue to help limit any deeper losses.
Investors' focus will remain glued to the Fed Chair Jerome Powell’s scheduled speech during the Asian session on Friday, especially after last Wednesday's comments, saying that rates were nearing neutral levels.
Should Powell put more emphasis on the rising risks to the US economy, investors will be forced to rethink possibilities of a pause in the rate hike cycle in 2019 and eventually determine the commodity's next leg of a directional move.
In the meantime, today's US economic docket, highlighting the release of ADP report on private sector employment and ISM non-manufacturing PMI, will be looked upon for some short-term trading opportunities.
Technical levels to watch
Any subsequent below $1233 level now seems to find support near the $1228-27 area, which if broken might accelerate the fall further towards 50-day SMA, around the $1220-19 region. On the flip side, the $1240-42 region might continue to act as an immediate strong hurdle, above which the commodity seems all set to aim towards testing $1250 level.
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
AUD/USD favours extra retracements in the short term
AUD/USD kept the negative stance well in place and briefly broke below the key 0.6400 support to clinch a new low for the year on the back of the strong dollar and mixed results from the Chinese docket.
EUR/USD now shifts its attention to 1.0500
The ongoing upward momentum of the Greenback prompted EUR/USD to lose more ground, hitting new lows for 2024 around 1.0600, driven by the significant divergence in monetary policy between the Fed and the ECB.
Gold aiming to re-conquer the $2,400 level
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
Bitcoin price defends $60K as whales hold onto their BTC despite market dip
Bitcoin (BTC) price still has traders and investors at the edge of their seats as it slides further away from its all-time high (ATH) of $73,777. Some call it a shakeout meant to dispel the weak hands, while others see it as a buying opportunity.
Friday's Silver selloff may have actually been great news for silver bulls!
Silver endured a significant selloff last Friday. Was this another step forward in the bull market? This may seem counterintuitive, but GoldMoney founder James Turk thinks it was a positive sign for silver bulls.