Gold fades the previous day’s upside momentum, heavy inside a choppy range off-late.
S&P 500 Futures extend Wall Street’s losses as escalating covid fears weigh on sentiment.
US-China, Russia-Ukraine tussles join the Fed’s blackout period to magnify risk-off mood.
Gold fails to extend Tuesday’s upbeat performance while easing to $1,777, down 0.07% intraday, during the initial Asian session on Wednesday. Although the coronavirus (COVID-19) sours the sentiment and weighs on the yellow metal, traders await fresh clues while staying inside a choppy range surrounding $1,780 off-late.
Covid resurgence dashes economic recovery hopes…
Not only the jump in Indian infections but fears of fresh covid variants and struggling vaccinations in Asia and Europe raise challenges for the previously upbeat expectations. Amid these plays, the New Delhi government boosts vaccinations while Japan is up for another virus-led emergency in Tokyo and surrounding prefectures.
Elsewhere, China warns the West to not interfere while Russia keeps building an army near the border to Ukraine. Furthermore, no guidance from the Fed ahead of next week’s meeting also weigh on market sentiment and gold prices.
Amid these plays, US President Joe Biden’s push for stimulus and easing virus-led activity restrictions in the UK and America couldn’t entertain the traders.
As a result, Wall Street benchmarks dropped for the second day while S&P 500 Futures print 0.10% intraday losses by the press time. It should be noted that the US dollar index (DXY) bounced off a seven-week low the previous day but the recovery moves seem limited off-late.
Looking forward, a light calendar can keep troubling the market players but the virus woes and geopolitical tension should offer intermediate direction. Though, fewer hopes are there for the bull’s return.
Technical analysis
Despite the latest pullback moves, gold prices are capped between 50-day and 100-day EMAs, respectively around $1,760 and $1,789, which in turn suggests the extension of recent weakness.
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