- Some follow-through USD buying dragged gold prices lower for the second straight day on Thursday.
- Recession fears continued weighing on investors’ sentiment and could lend support to the XAU/USD.
- Traders look forward to the US GDP report and other macro releases for some meaningful impetus.
Gold extended the overnight retracement slide from over a two-week high and witnessed selling for the second successive day on Thursday. The XAUUSD remained depressed through the early European session and was last seen trading just above the very important 200-day SMA support near the $1,840 region.
Minutes from the May 3-4 FOMC meeting showed that most participants believed a 50 bps rate increase would likely be appropriate in June and July. Apart from this, the worsening global economic outlook benefitted the US dollar's status as the global reserve currency, which, in turn, undermined demand for the dollar-denominated gold.
The downside, however, seems cushioned amid a generally weaker tone around the equity markets, which tends to benefit the safe-haven gold. The prospects for a more aggressive move by major central banks to constrain inflation, along with the Russia-Ukraine war, have been fueling recession fears and continued weighing on investors' sentiment.
The anti-risk flow was reinforced by the recent decline in the US Treasury bond yields. This might hold back the USD bulls from placing aggressive bets and further lend some support to the non-yielding gold. Hence, it will be prudent to wait for strong follow-through selling before positioning for the resumption of the prior descending trend.
Market participants now look forward to the US economic docket - featuring the release of the Prelim Q1 GDP, the usual Weekly Initial Jobless Claims and Pending Home Sales. This, along with the US bond yields, will influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities around gold.
Technical levels to watch
|Today last price||1846.93|
|Today Daily Change||-6.53|
|Today Daily Change %||-0.35|
|Today daily open||1853.46|
|Previous Daily High||1868.13|
|Previous Daily Low||1840.85|
|Previous Weekly High||1849.45|
|Previous Weekly Low||1786.94|
|Previous Monthly High||1998.43|
|Previous Monthly Low||1872.24|
|Daily Fibonacci 38.2%||1851.27|
|Daily Fibonacci 61.8%||1857.71|
|Daily Pivot Point S1||1840.16|
|Daily Pivot Point S2||1826.87|
|Daily Pivot Point S3||1812.88|
|Daily Pivot Point R1||1867.44|
|Daily Pivot Point R2||1881.43|
|Daily Pivot Point R3||1894.72|
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.