Gold Price Analysis: XAU/USD regains $1,700, still near one-month low

Gold prices retrace from the lowest in four-week to $1,700 amid the early Thursday morning in Asia. Even so, the yellow metal stays pressured amid broadly positive trading sentiment.

While US President Donald Trump’s softening of the earlier threat to use the military to tame the riots offered an initial boost to the risks, news of European economies preparing to open the tourism sector offered additional strength to the optimism.

Further to brighten the mood, hints that the European Central Bank (ECB) is up for adding more stimulus to its kitty and Germany is out with another aid program helped please the bullion bears. Additionally, upbeat US ISM Non-Manufacturing PMI and ADP Employment Change, together with US President Trump’s government funding offer to the five coronaviruses (COVID-19) vaccine developers, boosted the market’s positivity on Wednesday.

Amid all these catalysts, Wall Street flashed one more positive day whereas the US 10-year Treasury yields also gained over six basis points (bps) to 0.75% at the end of Wednesday’s trading session.

Moving on, a lack of major catalysts on the calendar might keep today’s Asian session a dull affair. Also likely to negatively affect the market’s performance is the presence of ECB and US Jobless Claims during the rest of the day. While the ECB is widely anticipated to add EUR500 billion to its Pandemic Emergency Purchase Programme (PEPP), US Jobless Claims might shrink further to 1800K from 2123K prior.

Technical analysis

Although a 50-day SMA level of $1,696 probes the precious metal’s sustained break below a six-week-old support line, at $1,701 now, the commodity traders may remain cautious ahead of today’s key events.