- Gold bulls fighting back control despite broad USD strength.
- Global recession woes lend support to Gold ahead of US data.
- Easing lockdown plans globally will likely keep the bounce limited.
Gold prices (XAU/USD) has bounced off four-day lows of $1692.04 and looks to extend the recovery momentum above the 1700 mark, despite a broadly firmer US dollar.
The yellow metal seems to benefit from a cautious start to the European markets, as looming concerns over the global economic damage from the coronavirus pandemic overshadow the optimism around the potential easing of the lockdown measures in some of the major economies.
Meanwhile, the USD bulls appear to take a breather in the early dealing, as the greenback consolidates the latest move higher against its six major peers. A typical pre-FOMC caution trading seems to pause the steady recovery in the buck. The FOMC begins its two-day monetary policy meeting later today.
Gold fell sharply by over 1% or nearly $25 from 1716 in Asia after the renewed tensions between the US and China over Beijing’s delayed response to tackle the coronavirus crisis dampened the market mood and lifted US dollar higher across the board.
Also, the oil-price slump aggravated the global deflationary fears and added to the downside in the inflation-hedge gold. Attention now turns towards the US CB Consumer Confidence data for a fresh trading impetus.
At the press time, gold trades at 1702.55, still down 0.68% on the day. The bias bearish will remain so long as the spot remains below the 5-DMA at 1718.23. Should the rebound fizzle out, the next support awaits at the upward sloping 21-DMA, now at 1675.70.
Gold additional 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
USD/JPY briefly recaptures 160.00, then pulls back sharply
Having briefly recaptured 160.00, USD/JPY pulls back sharply toward 159.00 on potential Japanese FX intervention risks. The Yen tumbles amid news that Japan's PM lost 3 key seats in the by-election. Holiday-thinned trading exaggerates the USD/JPY price action.
AUD/USD extends gains above 0.6550 on risk flows, hawkish RBA expectations
AUD/USD extends gains above 0.6550 in the Asian session on Monday. The Aussie pair is underpinned by increased bets of an RBA rate hike at its May policy meeting after the previous week's hot Australian CPI data. Risk flows also power the pair's upside.
Gold stays weak below $2,350 amid risk-on mood, firmer USD
Gold price trades on a softer note below $2,350 early Monday. The recent US economic data showed that US inflationary pressures stayed firm, supporting the US Dollar at the expense of Gold price. The upbeat mood also adds to the weight on the bright metal.
Ethereum fees drops to lowest level since October, ETH sustains above $3,200
Ethereum’s high transaction fees has been a sticky issue for the blockchain in the past. This led to Layer 2 chains and scaling solutions developing alternatives for users looking to transact at a lower cost.
Week ahead: Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.