- Gold prices lost their footing on Thursday but that has not deterred the optimists to stick to bullish outlook.
- All eyes on the central banks with next week's FOMC hurdle on the cards.
Update: Gold has been consolidating its recent gains and trades around $1,965 as tension mounts ahead of the all important decision by the Federal Reserve. Willingness to allow inflation to overheat has already supported XAU/USD – and details about this would work could further push the precious metal higher. Preview: How the Fed could drown markets while trying not to rock the boat
Gold has been giving back territory as the US dollar bounces back to life with the DXY advancing some 0.8% since the 92.70 lows.
At the time of writing, XAU/USD is trading at 1946 between $1,941 and $1,966 range ahead of the close.
Overnight, markets continued to trend down as the European Central Bank meeting provided little to stimulate equity markets.
The Dow Jones Industrial Average lost 405.89 points, or 1.45%, to 27,534.58, the S&P 500 dropped 59.77 points, or 1.76%, to 3,339.19 and the Nasdaq Composite fell 221.97 points, or 1.99%, to 10,919.59.
However, what would normally help gold bulls out has not come to fruition into the close on Thursday and prices fell 1.26% on the day.
But that has not perturbed the optimists. ''The set-up in gold is ripe for a breakout higher,'' analysts at TD Securities argue.
In a series of comments, the analysts believe that there is plenty of supportive nature for precious metals as follows:
We reiterate that the market has revealed few weak longs remaining in gold in recent trading sessions, creating an asymmetric balance of risks. In this context, today's announcement from the ECB removes one of two primary hurdles weighing on gold bugs.
After all, our macro strategists argue the central bank's inflation forecast revision shows no real concern with the exchange rate appreciation pass-through.
The second hurdle will be next week's FOMC, in which we expect officials to send a dovish signal through the wording on QE, the extension of the dot plot through 2023, and the chairman's press conference.
Over time, this will open up the door to an extension in the average maturity of Treasury purchases, which should further support precious metals.
|Today last price||26.86|
|Today Daily Change||-0.09|
|Today Daily Change %||-0.33|
|Today daily open||26.95|
|Previous Daily High||27.12|
|Previous Daily Low||26.41|
|Previous Weekly High||28.9|
|Previous Weekly Low||26.3|
|Previous Monthly High||29.86|
|Previous Monthly Low||23.44|
|Daily Fibonacci 38.2%||26.85|
|Daily Fibonacci 61.8%||26.68|
|Daily Pivot Point S1||26.54|
|Daily Pivot Point S2||26.12|
|Daily Pivot Point S3||25.83|
|Daily Pivot Point R1||27.25|
|Daily Pivot Point R2||27.54|
|Daily Pivot Point R3||27.96|
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.