|

Gold struggles to ride on risk aversion wave, stays below $1,700

  • Gold prices remain modestly changed despite broad risk-off sentiment.
  • The fears of US-China trade tussle, downbeat economics from Japan and coronavirus worries keep markets troubled.
  • PMIs can try to decorate the light calendar, trade/virus news should gain high importance.

Despite the recent risk-off sentiment, Gold prices remain more or less unchanged while flashing $1,687 as a quote during the Asian session on Friday. While the US-China trade war and downbeat catalysts from Japan seem to have been the major risk-signals off-late, US dollar pullback is likely behind the yellow metal’s lack of performance.

As if the current coronavirus (COVID-19) crisis isn’t enough for the world, US President Donald Trump offered additional challenges to the market while firing trade-war shots towards China. In return, Chinese state media attacked US Secretary of State Mike Pompeo with words like “enemy of humankind”, “highly venomous”, etc.

On the other hand, Japanese inflation and PMI data amplified fears of a recession in the world’s third-largest economy, the same was also backed by the NIKKEI survey. Further, NHK spread the news that the Japanese PM will extend emergencies in the nation on Monday.

It should also be noted that the US Dollar Index (DXY), a gauge of US dollar against major currencies, registers 0.13% gains, the first in the last six days, by the press time.

Looking at the risk catalysts, US 10-year Treasury yields remain unchanged near 0.62% but stocks in Asia have been flashing red signal even if China is off for Labor Day.

Given the market’s latest attention on trade headlines, coupled with the on-going fears from the COVID-19, a light economic calendar having the first revision of PMIs can only offer intermediate moves unless flashing extreme signals.

Technical analysis

While a three-week-old support line near $1,680 acts as the immediate support, 200-bar SMA level on the four-hour chart, near $1,640 becomes the key. On the upside, one-week-old falling trend line and the monthly resistance line since April 14, respectively near $1,720 and $1,733, challenge the bulls.

Additional important levels

Overview
Today last price1686.46
Today Daily Change-0.30
Today Daily Change %-0.02%
Today daily open1686.76
 
Trends
Daily SMA201690.2
Daily SMA501636.69
Daily SMA1001590.64
Daily SMA2001539.63
 
Levels
Previous Daily High1722.16
Previous Daily Low1681.76
Previous Weekly High1739
Previous Weekly Low1661.18
Previous Monthly High1747.82
Previous Monthly Low1568.46
Daily Fibonacci 38.2%1697.19
Daily Fibonacci 61.8%1706.73
Daily Pivot Point S11671.63
Daily Pivot Point S21656.49
Daily Pivot Point S31631.23
Daily Pivot Point R11712.03
Daily Pivot Point R21737.29
Daily Pivot Point R31752.43

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading 

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.