- Gold regained positive traction on Monday and snapped two consecutive days of losing streak.
- Dovish Fed expectations capped the USD recovery and extended some support to the metal.
- The underlying bullish tone might keep a lid on any strong gains for the safe-haven XAU/USD.
Gold built on its steady intraday ascent and climbed to fresh daily tops, around the $1,780 region during the early European session.
The precious metal caught some fresh bids on the first day of a new trading week and recovered further from two-week lows, around the $1,756 region touched last Thursday. This marked the first day of a positive move in the previous three trading sessions and was supported by a combination of factors.
The US dollar struggled to capitalize on last week's goodish rebound from the lowest level since February 26 amid expectations that the Fed will keep interest rates low for a longer period. This, in turn, was seen as a key factor that extended some support to the dollar-denominated commodity.
Meanwhile, the upside is likely to remain capped amid the underlying bullish sentiment in the financial markets, which tends to undermine the safe-haven XAU/USD. Investors might also refrain from placing aggressive bets ahead of the Fed Chair Jerome Powell's scheduled speech later this Monday.
In the meantime, the release of the US ISM Manufacturing PMI might influence the USD price dynamics and provide some impetus to the XAU/USD during the early North American session. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move.
From a technical perspective, any subsequent strength is likely to confront stiff resistance near the 100-day SMA, around the $1,786 region. This is followed by the recent swing highs, around the $1,796-98 region, which if cleared decisively should set the stage for additional gains in the near term.
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
US economy grows at an annual rate of 1.6% in Q1 – LIVE
The US' real GDP expanded at an annual rate of 1.6% in the first quarter, the US Bureau of Economic Analysis' first estimate showed on Thursday. This reading came in worse than the market expectation for a growth of 2.5%.
EUR/USD retreats to 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated to the 1.0700 area. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 with first reaction to US data
GBP/USD declined below 1.2500 and erased a portion of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold falls below $2,330 as US yields push higher
Gold came under modest bearish pressure and declined below $2,330. The benchmark 10-year US Treasury bond yield is up more than 1% on the day after US GDP report, making it difficult for XAU/USD to extend its daily recovery.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.