- Gold elevated above $1,700 as markets presume negative rates from the Fed.
- US dollar had been under pressure helping to support gold.
Gold is starting out the week in the consolidation of the March bull run, oscillating around $1,704 as market digest a US Nonfarm Payrolls that was not quite as bad as -22mn consensus, arriving at -20.5mn for April.
A dismal US Nonfarm Payrolls with the unemployment rate jumping to 14.7% from 4.4%, albeit below the 16.0% consensus will be a weight on the greenback for the start of this week. However, the focus will shift to the phased re-opening process of several US States as well as other nations such as the UK relaxing its lockdown measures.
Signs of economic recovery have stalled gold’s recent rally although there is still the possibility of the of Fed cutting rates to negative territory by early next year which has helped to bring gold above USD1,700/oz.
Yields are still under pressure
Markets will also be tuning in to the Federal Reserve's Chairman, Jerome Powell, this week, considering the shift in the FF futures curve. Bulls will be looking for a pushback against negative rates to help boost the US dollar.
"Yields are still under pressure in the wake of the recent refunding announcements — a surge in supply continues to weigh on Treasury markets," analysts at TD Securities explained,
This concerns gold and precious metals inasmuch as rising yields offer an alternative safe-haven to the yellow metal — thereby putting pressure on prices. This poses another risk to gold's short-term outlook, along with the potential for real rates to rise in the near-term, while the Fed would be unwilling to cut rates below zero to further suppress real rates, thereby weighing on gold.
Gold levels
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.
Recommended content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.