Gold Price News and Forecast: XAU/USD bullish bets in demand amid risk-off

FXStreet Team FXStreet

Gold: Bullish bets in demand amid risk-off

Bullish bets or call options on gold are drawing bids, according to risk reversals, a gauge of calls to puts on the safe-haven metal. One-month risk reversals (XAU1MRR) rose to 2.725 on Thursday to hit the highest level since Jan. 6, having bottomed out at 0.85 on Feb. 12.

The near-90 degree surge seen over the last two weeks indicates a rise in demand or implied volatility premium for call options – a sign investors are expecting gold to rise on coronavirus-led risk aversion in the equities and are adding bets to position for gains in the yellow metal.

Gold Price Analysis: XAU/USD can be at risk of correcting down further

XAU/USD is trading in an uptrend above the main daily simple moving averages (SMAs) as the market is trading in seven-year’s highs.

Gold has been easing from the 2020 top while trading above the main SMAs on the four-hour chart. While the trend is bullish a deeper correction down cannot be ruled out. A daily close below the 1638 support can lead to further retracements down towards 1627.86 and 1622.74 levels. Resistance can be expected near the 1650.00, 1655.00 and 1661.00 levels

EUR/USD retreats toward 1.1600 after upbeat US data

EUR/USD pulls away from session highs and declines toward 1.1600 in the American session on Wednesday. Upbeat private sector employment and ISM Services PMI data from the US help the US Dollar (USD) stay resilient against its rivals, limiting the pair's upside.

GBP/USD meets resistance around 1.3400

In line with its risk-linked peers, GBP/USD stages a modest comeback on Wednesday, although meeting some resistance around the 1.3400 neighbourhood. Cable’s humble recovery struggles to gather momentum as the Greenback benefits from better-than-forecast macroeconomic data releases.

Gold loses traction after testing $5,200

Gold corrects lower after testing $5,200 but manages to stay in positive territory in the second hald of the day on Wednesday. The precious metal remains well supported by the deterioration of the geopolitical scenario in the Middle East, while the US Dollar's resilience caps the upside.