Gold recovers further from 5-week lows, back above $1320 level

   •  Higher than expected US GDP does little to prompt fresh selling.
   •  Retracing US bond yields supportive of the short-covering bounce.

Gold held on to its modest recovery gains post-US GDP print and is now looking to build on its move back above 100-day SMA support turned resistance near the $1320 region.

The commodity stalled its recent downfall and found some decent support near $1315 level on Friday amid a modest retracement in the US Treasury bond yields, which was seen underpinning demand for the non-yielding yellow metal. 

However, a stronger than expected US Q1 GDP growth figure helped the US Dollar to preserve its strong gains to 3-1/2 month highs and might keep a lid on any strong up-move for dollar-denominated commodities - like gold. 

This coupled with improving investors' risk appetite, as depicted by buoyant trading sentiment around equity markets and which tends to weigh on traditional safe-haven assets, might further collaborate towards capping any meaningful up-move. 

From a technical perspective, yesterday's break below 100-day SMA, for the first time since late December, indicated a near-term bearish breakdown. Hence, it would be prudent to wait for a strong follow-through buying interest before confirming that the commodity might have bottomed out in the near-term.

Technical levels to watch

Immediate resistance is pegged near the $1324-25 region, above which the recovery move could get extended towards $1330-32 supply zone. On the flip side, $1316 level now becomes an immediate support to defend, which if broken is likely to accelerate the fall towards $1310 horizontal support en-route the very important 200-day SMA support near the $1302-1300 region.

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.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD rises above 1.2150 amid upbeat German data

EUR/USD has been rising above 1.2150 after the German ZEW Economic Sentiment gauge beat expectations with 84.4 points. Earlier, concerns about inflation boosted the dollar. 


GBP/USD trades off the highs amid risk-off mood, ahead of Bailey

GBP/USD is trading above 1.41 but off the fresh highs. The safe-haven dollar is gaining ground amid fears of inflation. UK PM Johnson's announcement of additional easing of restrictions boosted the pound on Monday. BOE Governor Andrew Bailey is set to speak later on.


XAU/USD remains confined in a range below $1,840 level

Gold is in the hands of the bulls but a correction is on the cards.  The monthly outlook is critical which makes the next few weeks testing for the gold market. 

Gold News

SHIB price skyrockets as Binance Lists Dogecoin rival Shiba Inu

“DOGE killer” Shiba Inu coin has reached a new all-time high as it rides on bullish momentum from recent crypto exchange listings. SHIB price has climbed by over 2,260% in the past week, as many investors missed out on the Dogecoin pump.

More Crypto News

Nasdaq (NDX QQQ) Technical view, key chart levels, Nasdaq tests trendline support

The Nasdaq is trading nicely from resistance to support. Friday's rally stalled at the convergence of the 9 and 21-day resistance. Monday sees the resistance work well and so the Nasdaq sells off and currently finds support at the lower trendline seen in the chart below.

Read more