- Risk-off at full steam, haven demand for Gold tops USD’s.
- Second coronavirus wave fears, trade tensions underpin.
- Gold appears weak while below 21-DMA at 1706.44.
Gold prices (XAU/USD) extend the rebound from the Asian low of $1693.76, as the risk-off sentiment seeps into Europe amid fears over the second wave of the coronavirus outbreak and escalating Australian-China trade tensions.
The yellow metal manages to sustain the bounce above the 1700 level, as the US dollar loses ground across the board amid a steep sell-off in the US Treasury yields, with markets repositioning ahead of the critical US CPI release.
The ongoing chatter over the negative interest rate also likely weighs on the US rates. The US dollar index (DXY) drops to fresh daily lows of 100.12, down 0.11% on the day. The DXY rallied to 100.44 in early Asia after China retaliated to Australia’s call for COVID inquiry by banning the imports from four Aussie abattoirs.
Further, optimism around the US-China Phase One trade deal also seems to the renewed weakness seen around the buck, in turn, benefiting the USD-denominated Gold. China’s Foreign Ministry reiterated that the US and China should implement the trade deal. The Chinese Finance Ministry issued a second list of tariff waivers for some US goods earlier today.
The traditional safe-haven, gold, will continue to derive support from growing fears over the second wave of coronavirus, with China and South Korea having reported new infections. Looking ahead, the US deflationary pressures will likely call for more stimulus from the US Federal Reserve (Fed) and boost gold’s attractiveness.
Gold: Technical levels to watch
At the press time, gold trades at 1703.20, up 0.30% on the day. The bulls now target the 21-DMA at 1706.44. The next resistance is aligned at 1710 (round number). On the flip side, the daily low will offer the immediate support, below which Monday’s low of 1690.05 could be tested.
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 clings to recovery gains above 1.3200, as BoE looms
GBP/USD sustains the recovery above 1.3200 in early Europe on Thursday, having found buyers near 1.3150. A fresh US Dollar pullback and a rebound in risk sentiment offer support to the pair ahead of the BoE policy announcements.
EUR/USD holds higher ground above 1.1100, focus shifts to ECB-speak
EUR/USD is holding higher ground above 1.1100 in the early European session on Thursday. The pair is underpinned by the renewed US Dollar retreat, as traders digest the Fed's dovish outlook, bracing for ECB-speak for fresh trading incentives. US data are also eyed.
Gold price jumps back closer to all-time peak, $2,600 remains in sight amid fresh USD weakness
Gold price regains positive traction following the previous day's pullback from the all-time peak and builds on its steady intraday ascent heading into the European session on Thursday.
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.
Bitcoin surges to $62,000 mark after 50 bps Fed rate cut
Bitcoin and Ripple eye for a rally as they break and find support around their resistance barrier. Meanwhile, Ethereum demonstrates signs of recovery as it approaches a critical resistance level, indicating that an upward rally could be on the horizon if it successfully breaks through.
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.