• USD regains positive traction and prompts some fresh selling.
• A goodish pickup in the US bond yields adds to the bearish pressure.
• Fading safe-haven demand does little to lend any support.
Gold struggled to build on overnight modest recovery attempt from one-year lows and came under some renewed selling pressure on Thursday.
Investors looked past yesterday's disappointing US housing market data and the US Dollar caught some fresh bids, which was now seen as one of the key factors prompting some fresh selling around dollar-denominated commodities - like gold.
Meanwhile, upbeat economy outlooks from the Fed Chair Jerome Powell and the central bank’s Beige Book report further reinforced expectations about gradual Fed monetary policy tightening cycle. The same was evident from a goodish pickup in the US Treasury bond yields and further collaborated towards driving flows away from the non-yielding yellow metal.
With growing trade war concerns failing to revive demand for traditional safe-haven assets, stability in global financial markets exerted some additional downward pressure and did little to assist the precious metal to register any meaningful recovery.
Today's US economic docket, featuring the release of Philly Fed Manufacturing Index and the usual initial weekly jobless claims data, might provide some short-term trading impetus ahead of a scheduled speech by the Fed Governor Randal Quarles.
Technical levels to watch
A follow-through weakness below overnight swing low level of $1221 is likely to accelerate the fall towards $1214 horizontal zone before the commodity eventually drops to test July 2017 swing lows support near the $1205 region.
On the flip side, the $1228-29 area now seems to have emerged as an immediate resistance, which if cleared might trigger a short-covering bounce back towards previous YTD lows, around the $1237-38 region.
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.