Gold remains below $1280, recovery stays limited amid broad USD strength
- US Dollar Index extends impressive rally on Thursday.
- Sour market sentiment helps gold post small gains.
- Coming up: Weekly jobless claims and durable goods orders data from the U.S.
After refreshing its lowest level of the year near $1266 on Tuesday, the XAU/USD pair staged a technical correction on Wednesday and extended its rebound into a second day today. However, with the greenback finding constant demand, the pair is having a difficult time gathering momentum. As of writing, the pair was up a little more than $2 on the day at $1277.
The sharp drop witnessed in the 10-year US Treasury bond yield yesterday hinted at a risk-off atmosphere, which allowed the precious metal to grab investors' attention. Today's the 10-year yield is virtually unchanged on the day so far while major European equity indexes are suffering moderate losses, suggesting that the market sentiment today is neutral/negative.
Meanwhile, the broad-based selling pressure surrounding the major European such as the euro and the British pound ramped up the demand for the dollar as a better alternative and fueled the US Dollar Index's rally to its best level since May of 2017, capping the pair's upside for the time being. Later in the day, weekly jobless claims and the durable goods orders from the U.S. will be looked upon for fresh impetus.
On Friday, first-quarter GDP data from the U.S., which is expected to tick down to 2.1% on a yearly basis, will be the final catalyst of the week.
Technical levels to consider
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
