|

Gold recovers early lost ground to fresh 19-month low, lacks follow-through

   •  Near-term oversold conditions triggered some short-covering bounce. 
   •  A modest USD profit-taking remains supportive of the modest rebound.
   •  Risk recovery/positive US bond yields keep a lid on any further recovery.

Gold quickly reversed an early Asian session keen-jerk fall to $1160 level, fresh 19-month low, and has now turned higher for the day.

Currently trading around the $1177-78 region, testing session tops, the precious metal's sharp rebound from the lowest level since Jan. 2017 could be categorized as a technical bounce amid near-term oversold conditions. 

The ongoing US Dollar profit-taking slide, which tends to underpin demand for dollar-denominated commodities - like gold, seems to be one of the key factors prompting some aggressive short-covering move. 

However, a slight improvement in investors’ appetite for riskier assets, as depicted by a mildly positive trading sentiment around most European equity markets, weighed on the precious metal's safe-haven appeal.

This coupled with resurgent US Treasury bond yields and prospects for a gradual Fed rate hike path further collaborated towards keeping a lid on any strong follow-through for the non-yielding yellow metal.

Hence, it would now be interesting to see if the commodity is able to build on the recovery move or the uptick turns out to be a dead-cat bounce, against the backdrop of this week's slump of over 4%. 

Technical levels to watch

Any subsequent up-move is likely to confront fresh supply near the $1180-81 area, above which the recovery move could further get extended towards $1193 horizontal resistance. On the flip side, $1170 level now seems to protect the immediate downside, which if broken might turn the metal vulnerable to head back towards retesting daily swing lows, around the $1160 region.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD recovers to 1.1750 region as 2025 draws to a close

Following the bearish action seen in the European session on Wednesday, EUR/USD regains its traction and recovery to the 1.1750 region. Nevertheless, the pair's volatility remains low as trading conditions thin out on the last day of the year.

GBP/USD stays weak near 1.3450 on modest USD recovery

GBP/USD remains under modest beairsh pressure and fluctuates at around 1.3450 on Wednesday. The US Dollar finds fresh demand due to the end-of-the-year position adjustments, weighing on the pair amid the pre-New Year trading lull. 

Gold retreats to $4,300 area, looks to post monthly gains

Gold stays on the back foot on the last day of 2025 and trades near $4,300, possibly pressured by profit-taking and position adjustments. Nevertheless, XAU/USD remains on track to post gains for December and extend its winning streak into a fifth consecutive month.

Bitcoin, Ethereum and XRP prepare for a potential New Year rebound

Bitcoin, Ethereum, and Ripple are holding steady on Wednesday after recording minor gains on the previous day. Technically, Bitcoin could extend gains within a triangle pattern while Ethereum and Ripple face critical overhead resistance. 

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Crypto market outlook for 2026

Year 2025 was volatile, as crypto often is.  Among positive catalysts were favourable regulatory changes in the U.S., rise of Digital Asset Treasuries (DAT), adoption of AI and tokenization of Real-World-Assets (RWA).