- Gold began the week mostly unchanged around $1,940 before probing $1,930.
- US dollar strength, vaccine hopes and equity gains exert downside pressure.
- Bulls stay hopeful as cases in Europe rise off-late, US policymakers jostle over aid package.
- A lack of major data keeps risk catalysts in the spotlight.
Gold drops to $1,931 amid the early Monday morning in Asia. The yellow metal flashed the second consecutive weekly loss while closing around $1,940 on Friday. The US dollar’s pullback from the multi-month low could be considered as the major reason for the bullion’s latest weakness. Additionally, Wall Street’s gains and market’s wait for the key events also probe the bulls after they stepped back from the record high.
Bears cheer even small news, bulls await a major push…
US President Donald Trump’s latest comments suggesting the authorized emergency use of convalescent plasma could be considered as the latest push to the commodity bears. The news strengthens vaccine hopes. The update becomes additionally important considering the recently receding coronavirus (COVID-19) numbers from the US and Australia. However, the strong bounce-back of the virus in Germany, France and Spain keeps the risk aversion on the table.
On the other hand, US President Trump keeps attacking (verbally) China with the latest comments, shared by Fox Business News, suggesting the possibility of decoupling the US economy from China. Even so, the hopes of the phase-one deal talks stay on the policymakers’ chart and hence keep the risks a little lower.
Elsewhere, the US policymakers are yet to finalize when they will start negotiating the COVID-19 aid package. The recent hurdle came from the Democratic Party wherein House Speaker Nancy Pelosi took a U-turn from her previous readiness to cut the demands in half. It’s worth mentioning that the US data have been positive off-late, PMIs and Existing Home Sales being the latest, whereas numbers from the rest of the globe haven’t been quite impressive.
Against this backdrop, S&P 500 Futures gain 0.15% after the Wall Street benchmark flashed the biggest run-up of the year 2020, with consecutive four weeks of rising.
While no major data/events are up for release on Monday, the Jackson Hole Symposium, up for Thursday and Friday, will be the key for the week. Also, the American policymakers are eyed for any decision on the stimulus and hence traders are holding their breath for fresh impetus.
Technical analysis
A short-term symmetrical triangle formation between $1,925 and $1,974 restricts gold’s immediate moves with bearish MACD favoring the sellers.
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.