- Gold holds lower ground despite recently bouncing off $1,830.
- Talks over US stimulus, Brexit drag on, virus woes add to the market worries.
- DXY snaps four-day recovery while tracking US treasury yields, Wall Street benchmarks trade mixed.
- Vaccine news, Brexit updates and stimulus headlines can entertain Asian traders amid a light calendar.
Gold fades the latest pullback from $1,830.32 while easing to $1,835 at the start of Friday’s Asian session. In doing so, the yellow metal nurses losses after declining for the last two days. Although optimism over the coronavirus (COVID-19) vaccine probe the gold bears’ dominance, wait for the US covid stimulus and Brexit worries joins worsening virus conditions in American to keep the commodity afloat.
Bulls and bears jostle amid cautious optimism…
With the speedy government approvals to the COVID-19 vaccine by the UK and Canada, with the US in the pipeline, global traders eye recovery as the American policymakers are near to clinching the deal on the much-awaited stimulus. However, the wait for the same joins negative signals for Brexit, amid preparations of contingency plans, to weigh on the risks and the precious metal off-late.
Also on the negative side is the record covid-led death toll in the US as well as a jump in the US Jobless Claims, coupled with sticky inflation data. It’s worth mentioning that the Sino-American and the Aussie-China tussles are offering background music to the bears but have been heard a little off-late.
Meanwhile, the European Central Bank’s (ECB) addition to the stimulus, as expected, offered a sigh of relief to the bloc’s equity traders while Wall Street players end the day on mixed footings.
These catalysts portrayed the US dollar index (DXY) losses for the first time in the last five days while the US 10-year Treasury yields also dropped, recently by 3.5 basis points (bps), to 0.908% at the end of Thursday’s North American session.
Looking forward, a light calendar in Asia keeps the trader directed towards qualitative catalysts for fresh impetus. A vaccine announcement from the US Food and Drug Administration (FDA) is in the pipeline and can offer the much-needed push to the gold. Though, likely downside due to the surprise negatives from Brexit and/or US aid package negotiation desk can’t be ruled out.
Technical analysis
Although an ascending trend line from November 30 offers immediate support around $1,830, the metal’s sustained trading below 21-day SMA and 50-day SMA, currently around $1,843 and $1,876, portrays the underlying weakness in momentum. As a result, gold sellers targeting a re-test of 200-day SMA, at $1,808.50 now, stay hopeful.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.