Gold jumps to two-week high as S&P 500 futures slip on political uncertainty

Omkar Godbole FXStreet Contributor

The Comey memo is shaking things up this Wednesday morning in Asia. The S&P 500 futures dropped 14 points or 0.62%, while the safe haven gold clocked a two-week high of $1245.02 levels.

Will Gold break above 200-DMA?

The disclosure that President Trump divulged classified intelligence to two high-ranking Russian officials was somehow digested by the markets on Monday. However, in just 24 hours another scandal - Comey memo, has hit the wires and the markets are having a tough time digesting the political uncertainty.

The 200-DMA positioned at $1245.24 could be breached if the risk-off tone in the markets is carried over to the European stocks later today. As of now, the FTSE 100 futures and DAX futures are down 17 points and 59 points, respectively.

Meanwhile, the S&P500 VIX is still at the lower end of its post-GFC range. A potential spike in the Wall Street’s “fear gauge” could increase the demand for the yellow metal as well.

Gold Technical Levels

The metal was last seen trading at $1243/Oz levels. A break above $1245.24 (200-DMA) would open up upside towards $1254.71 (23.6% Fib retracement of $1122.81-1295.46) and $1263.87 (Feb 27 high). On the other hand, a breakdown of support at $1236.24 (session low) could yield a pull back to $$1229.51 (38.2% Fib retracement of $1122.81-1295.46 + 100-DMA) and $1225.85 (May 4 low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	High
1H	Slightly Bullish	Overbought	High
4H	Slightly Bullish	Overbought	High
1D	Bullish	Neutral	Low
1W	Strongly Bearish	Neutral	Shrinking
Updated May 17, 00:15 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD struggles near 0.7100 ahead of RBA Bullock's speech

AUD/USD stays defensive near 0.7100 in the Asian session on Tuesday, shrugging off hawkish comments from RBA Assistant Governor Sarah Hunter as traders keenly await a speech from RBA Governor Michele Bullock. Meanwhile, escalating tensions in the Middle East and the Fed's hawkish outlook remain supportive of the bullish US Dollar undertone, weighing on the pair. The crucial Trump-Xi summit is later this week and remains in focus.

USD/JPY holds small gains near 157.50 as JPY intervention risks loom

USD/JPY posts modest gains while trading near 157.50 in the Asian session on Tuesday as intervention fears help limit losses for the Japanese Yen. However, the BoJ's dovish rate hike to a 31-year high keeps JPY bulls on the back foot. Meanwhile, the US Dollar retains a bullish undertone amid the Fed's hawkish outlook and escalating Middle East tensions, providing tailwinds for the pair.

Gold benefits from falling US bond yields; remains below $4,400 amid bullish USD

Gold regains positive traction during the Asian session on Tuesday, though it lacks bullish conviction and remains below $4,400. Falling oil prices ease inflation fears, dragging US bond yields lower and supporting the non-yielding yellow metal. Meanwhile, the Fed's hawkish stance, along with escalating Middle East tensions, keeps the US Dollar near its highest level since late July and acts as a headwind for the bullion.

Ethereum rallies above $2,700 as investors shrug off bearish sentiment

Ethereum (ETH) climbed above $2,700 on Monday after investors defended the realized price level despite negative sentiment over the Clarity Act's failure and the Federal Reserve rate hike. After the Clarity Act failed to advance in the Senate, ETH dipped below $2,400 last week. But right below that price is the top altcoin's realized price, or average on-chain cost basis, at $2,310.

Iranian President will head to New York for UN meeting

President Masoud Pezeshkian will lead an Iranian delegation at the United Nations General Assembly in New York on Tuesday, amid renewed hopes for a diplomatic solution to the Middle East conflict, CNBC reported on Monday. A high-ranking Iranian delegation, including Foreign Minister Abbas Araghchi, will accompany President Pezeshkian.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.