- Gold seesaws near fresh two-month high marked on Tuesday, picks up bids above $1,950 off-late.
- Risk dwindles amid US-China tussle, Georgia election results awaited.
- China Caixin Services PMI, virus updates also becomes important to watch.
Gold prices attack the upper end of the $1,947-53 trading range, currently near $1,951, during the initial Asian trading on Wednesday. The yellow metal jumped to the fresh high since November 09 the previous day as the US dollar refreshed multi-month low and risks improved. However, cautious sentiment ahead of Georgia’s election results, coupled with the Sino-American tension, recently challenged the commodity buyers.
Cautious optimism prevails…
Although the early exit polls for Georgian election results keep Republicans ahead of the Democrats, global market players trust Joe Biden and the company’s ability to offer heavy stimulus with the Senate power. Also on the positive side could be the coronavirus (COVID-19) vaccine news that battles the virus strain and lockdown updates. Having heard over 95% success rate for leading covid vaccines from the US Food and Drug Administration (FDA), recent news that millions of medicines are on the way to the UK favor the risks off-late.
Read: Georgia Elections Preview: Markets geared for a special moment, three scenarios
Alternatively, the US-China tussles escalate with US President Donald Trump signing an executive order to stop business with eight Chinese applications. Earlier in the day, the New York Post conveyed the news of China’s blocking the COVID-19 origin’s investigations. On the same line, Bloomberg said the New York Stock Exchange is reconsidering its decision to halt the delisting of three major Chinese telecommunications firms.
Amid these plays, S&P 500 Futures drop 0.16% by press time despite Wall Street’s upbeat performance.
Moving on, gold trades will keep eyes on Georgia election results, buyers will cheer Democratic victory, while virus updates and Sino-American news can offer extra directives. It should be noted that the US ADP Employment Change, expected 88K versus 307K prior, as well as the FOMC minutes, will also be important to watch. It should additinaly be noted that Chinas' Caixin Services PMI, expected to recede to 51 from 57.5, will also offer extra directives to gold prices.
Technical analysis
November’s high near $1,966 lures gold buyers unless witnessing a downside break below October 2020 top surrounding $1,933.
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
AUD/USD rises to two-day high ahead of Aussie CPI
The Aussie Dollar recorded back-to-back positive days against the US Dollar and climbed more than 0.59% on Tuesday, as the US April S&P PMIs were weaker than expected. That spurred speculations that the Federal Reserve could put rate cuts back on the table. The AUD/USD trades at 0.6488 as Wednesday’s Asian session begins.
EUR/USD holds above 1.0700 on weaker US Dollar, upbeat Eurozone PMI
EUR/USD holds above the 1.0700 psychological barrier during the early Asian session on Wednesday. The weaker-than-expected US PMI data for April drags the Greenback lower and creates a tailwind for the pair.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Ethereum ETF issuers not giving up fight, expert says as Grayscale files S3 prospectus
Ethereum exchange-traded funds theme gained steam after the landmark approval of multiple BTC ETFs in January. However, the campaign for approval of this investment alternative continues, with evidence of ongoing back and forth between prospective issuers and the US SEC.
Australia CPI Preview: Inflation set to remain above target as hopes of early interest-rate cuts fade
An Australian inflation update takes the spotlight this week ahead of critical United States macroeconomic data. The Australian Bureau of Statistics will release two different inflation gauges on Wednesday.