Gold Price Analysis: XAU/USD seeks fresh clues to hold corrective pullback above $1,770
- Gold struggles to extend recovery moves beyond $1,780.
- Market sentiment dwindles after Yellen confused traders, mixed updates on covid, vaccines.
- Off in China, Japan adds to the market’s indecisiveness, risk catalysts remain as the key factors to watch.
Gold lacks upside momentum while taking rounds to $1779-80 amid the initial Asian session on Wednesday. The bright metal dropped the most since March 31 the previous day, before bouncing off $1,770.90. As no major risk-positive news crossed wires of late, the corrective pullback seems to wait for a fresh push to stay on the table.
Mixed clues, cautious sentiment tease bears…
Following the escalation in the coronavirus (COVID-19) woes in Asia, the upbeat vaccine developments and hopes of easing the pandemic in some parts of India tested gold sellers. However, comments favoring the rate hike from US Treasury Secretary Yellen roiled market sentiment before the key US diplomat took a U-turn on her initial statements.
While the risk-off mood put a bid under the US dollar, Wall Street bears cheered technology shares’ heavy selling even as Dow Jones Industrial Average (DJI30) managed to bounce in the last hours.
In addition to hints concerning the monetary policy normalization and COVID-19, gold traders were also baffled by downbeat US data that backed the risk-aversion and the USD.
It should, however, be noted that ongoing holidays in Japan and China restrict the market moves ahead of the key US activity and employment numbers.
Among them, today’s US ISM Services PMI will be the first to entertain momentum traders after the ISM Manufacturing PMI disappointed markets.
Read: US ISM Services PMI April Preview: Inflation readings remain key as recovery gains strength
If the risk catalysts keep flashing mixed signals, gold may choose to remain volatile within the immediate trading range below $1,800.
Technical analysis
Despite Tuesday’s sell-off, gold prices stay above $1,766-69 support confluence comprising 50-day and 21-day EMA, as well as a three-week-old ascending trend line, which in turn keeps the buyers hopeful.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
