- Gold gained traction for the second consecutive session on Wednesday.
- Renewed COVID-19 jitters provided a modest lift to the safe-haven metal.
- An uptick in the US bond yields underpinned the USD and capped gains.
Gold edged higher through the first half of the trading action on Wednesday, albeit lacked any strong follow-through buying. The commodity was last seen hovering just above the $1,780 level, up around 0.25% for the day.
The precious metal gained traction for the second consecutive session on Wednesday and moved back closer to multi-week tops touched earlier this week. Renewed fears about another dangerous wave of coronavirus infections in some countries turned out to be a key factor that provided a modest lift to the safe-haven XAU/USD.
This marked the fourth day of a positive move in the previous five, though a combination of factors kept a lid on any further gains. Bulls once again failed near the 100-day EMA barrier, around the $1,790 region amid a goodish pickup in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.
Meanwhile, an uptick in the US bond yields assisted the US dollar to recover further from the seven-week lows touched in the previous day. This was seen as another factor that capped gains for the dollar-denominated commodity. That said, expectations that the Fed will keep rates low for a longer period should help limit the downside.
The fundamental backdrop favours bullish traders and supports prospects for additional gains. Even from a technical perspective, last week's move beyond the $1,760-65 region validated a bullish double-bottom pattern. However, it will be prudent to wait for a sustained break through the $1,790 hurdle before placing fresh bullish bets.
In the absence of any major market-moving economic releases from the US, traders might continue to take cues from the broader market risk sentiment. Apart from this, the US bond yields will influence the USD price dynamics and further contribute to produce some short-term trading opportunities around the XAU/USD.
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
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
GBP/USD consolidates above 1.2500, eyes on US PCE data
GBP/USD fluctuates at around 1.2500 in the European session on Friday following the three-day rebound. The PCE inflation data for March will be watched closely by market participants later in the day.
Gold clings to modest daily gains at around $2,350
Gold stays in positive territory at around $2,350 after closing in positive territory on Thursday. The benchmark 10-year US Treasury bond yield edges lower ahead of US PCE Price Index data, allowing XAU/USD to stretch higher.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.