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 struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD tests key moving averages as growth downgrade weighs

GBP/USD was nearly flat on Wednesday, edging up 0.08% to settle around 1.3370 in a quiet session. The pair has fallen sharply from its late-January high near 1.3870 and is now testing the 200-day Exponential Moving Average, with this week's one-week forex heatmap showing Pound Sterling as one of the worst performers against the US Dollar, down about 1.4% on the week.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.