• 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. 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.