Gold surrenders early gains to all-time highs, back around $1960 region
- Sustained selling around the USD assisted gold to catch some fresh bids on the last day of the week.
- A positive opening in the US equity markets prompted some profit-taking amid overbought conditions.
Gold reversed a major part of its early positive move to all-time highs and has now retreated to the lower end of its daily trading range, around the $1960 region.
Following the previous day's modest pullback and a subsequent rebound from the $1940 area, the precious metal managed to regain traction and touched a fresh record higher level of $1984. The uptick marked the tenth day of a positive move in the previous eleven and was sponsored by the heavily offered tone surrounding the US dollar, which tends to benefit the dollar-denominated commodity.
The USD remained depressed on the last day of the week fell to its lowest level since May 2018 amid worries that the ever-increasing coronavirus cases could undermine the US economic recovery. The greenback was further pressured by a more dovish statement by the Fed on Wednesday and the failure of the US lawmakers to reach an agreement on the next package of stimulus measures.
However, a modest pickup in the global risk sentiment – as depicted by indications of a positive opening in the US equity markets – undermined the precious metal's safe-haven status. This coupled with a goodish rebound in the US Treasury bond yields further collaborated towards capping gains for the non-yielding yellow metal, instead prompted traders to take some profits off the table.
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Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
