EUR/USD has lost its traction in the American session and retreated to the 1.0550 area. In the absence of high-tier macroeconomic data releases, the dollar is staging a rebound with the US Dollar Index rising above 103.00 and forcing the pair to edge lower.
GBP/USD has extended its sideways grind below 1.2500 into the second half of the day on Friday with the dollar staying resilient against its rivals. Nevertheless, the pair remains on track to snap a four-week losing streak.
Gold came under modest bearish pressure in the American session on Friday and dropped below $1,840. The benchmark 10-year US Treasury bond yield stays quiet above 2.8%, helping XAU/USD limit its losses ahead of the weekend.
In the Forex market, gold is a form of currency. The internationally accepted code for gold is XAU which is a symbol used under the ISO 4217 currency standard to denote one troy ounce of gold. It is known to be a “safe-haven” asset, expected to increase its value in times of volatility and economic uncertainty.
The XAU/USD pair tells the trader how many US Dollar (the quote currency) are needed to purchase one Gold Ounce (the base currency). The United States is the country that holds the biggest resources of gold in the world.
HISTORIC HIGHS AND LOWS FOR XAU/USD
All-time records: Max: 1920.80 on 06/09/2011 - Min: 35.32 on 27/07/1970
Last 5 years: Max: 1,645.38 on 21/02/2020 - Min: 1046.23 on 03/12/2015
* Data as of February 2020
ASSETS THAT INFLUENCE XAU/USD THE MOST
The XAU/USD can also be impacted by other elements such as the following:
Currencies: USD and EUR.
Commodities: Silver, the other most important precious metal commodity together with Gold.
Bonds: Bund (the German word for "bond", a debt security issued by Germany's federal government) and T-Note (Treasury Note, a marketable U.S. government debt security).
Indices: Hui (AMEX Gold BUGS), XAU (Philadelphia Gold and Silver Sector Index) and GDM (NYSE Arca Gold Miners Index) The most important stock exchanges are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.
ORGANIZATIONS THAT INFLUENCE XAU/USD THE MOST
WGC (World Gold Council), the market development organisation for the gold industry.
LBMA, London Bullion Market Association, whose members conduct trading in this wholesale over-the-counter market for the trading of gold and silver. It is loosely overseen by the Bank of England.
COMEX (Commodity Exchange Inc.), the primary market for trading metals.
Zurich Gold Pool founded in 1968 by the largest banks in Switzerland after the collapse of the London Gold Pool.
CGSE, the Chinese Gold & Silver Exchange Society is an organisation of gold trading firms in Hong Kong who are participants of the Chinese Gold and Silver Exchange.
PEOPLE THAT INFLUENCE XAU/USD THE MOST
David Harquail, the World Gold Council’s Chairman and the CEO of Franco-Nevada Corporation.
Jerome Powell, the 16th Chair of the Federal Reserve.
Xi Jinping, President of the People's Republic of China and General Secretary of the Communist Party of China.
ECONOMIC DATA THAT INFLUENCE XAU/USD THE MOST
The main indicators that traders should watch to understand where gold is standing are:
Demand vs Supply for the commodity
Struggling markets or context of currency devaluation: gold is known to be a haven for investors in times of economic uncertainty or when any country sees its currency devaluing.
Practical applications: technology invents, jewellery use, etc.