• A modest USD profit-taking slide prompts short-covering from an important support.
• Weaker equities underpin safe-haven demand and provide an additional boost.
• US PPI eyed for some trading impetus ahead of Thursday’s more relevant CPI print.
Gold once again managed to bounce off the very important 200-day SMA and has now recovered a major part of its early slide to 1-week lows.
A modest US Dollar profit-taking slide, especially after the recent relentless rally to multi-month tops, was seen as one of the key factors behind the precious metal's rebound from an intraday low level of $1304.32. A weaker greenback tends to benefit dollar-denominated commodities - like gold.
This coupled with a mildly negative tone around European equity markets provided an additional boost to the precious metal's safe-haven appeal and remained supportive of the goodish rebound back above the $1310 level.
However, a strong follow-through uptick in the US Treasury bond yields, amid rising speculations that the Fed might be forced to opt for a steeper monetary policy tightening cycle, kept a lid on any further up-move for the non-yielding yellow metal.
On the economic data front, the release of US Producer Price Index (PPI) for April would now be looked upon for some impetus ahead of the more relevant consumer inflation figures, due on Thursday.
Technical levels to watch
Any subsequent recovery beyond $1314-16 immediate resistance is likely to get extended and might assist the commodity to aim towards testing 100-day SMA barrier near the $1325 region.
On the flip side, $1306-05 zone (200-DMA) might continue to protect the immediate downside, which if broken might turn the metal vulnerable to break below the $1300 handle head towards testing $1394-93 support.
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 regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.