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

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD hits highest since September amid upbeat mood

EUR/USD has surpassed 1.1920, the highest in around 10 weeks as markets cheer the US transition and upcoming vaccines. A busy data day awaits traders ahead of the Thanksgiving holiday. 


XAU/USD stages a modest recovery from multi-month lows

Gold witnessed some short-covering move on Wednesday from the $1800 mark. COVID-19 vaccine optimism might cap any strong gains for the safe-haven metal. Investors now eye US macro data, FOMC minutes for a fresh directional impetus.

Gold news

GBP/USD advances toward 1.34 amid Brexit hopes

GBP/USD is rising toward 1.34 after EC President von der Leyen said there is progress in Brexit talks. UK Chancellor Sunak's speech and US data are awaited later in the day.


WTI rally continues despite large US inventory build

Oil has climbed to fresh multi-month highs, extending Tuesday's price gains as optimism emanating from potential coronavirus vaccines overshadows inventory build-up in the US. The API reports a large buildup of inventories in the weeke ended Nov. 20.

Oil News

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info