Gold again aims for $1280 break as traders remain cautious
|- Risk-tone weighs heavy and the US Dollar (USD) trims some of its recent gains ahead of the US GDP.
- $1280 continues to remain as near-term important resistance with $1265 being crucial downside support.
Gold is on the bids around $1278 during early Friday. Monetary policy statements from the global central banks have turned the risk tone heavier off-late while the US GDP is on the spotlight for fresh clues.
Bank of Japan’s (BOJ) downward revisions to inflation and growth forecasts follow dovish statements from the Bank of Canada (BOC). Recently, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr also said in an interview that the central bank might not refrain from cutting the interest rates if required. Earlier during the week, sluggish inflation numbers from Australia highlighted an imminent rate cut from the Reserve Bank of Australia (RBA).
Hence, dovish stand from global central banks helps the yellow metal maintain its allure.
On the other hand, the US Dollar (USD) manages to remain strong on the back of strong fundamentals.
Though, investors remained cautious ahead of the preliminary first quarter (Q1) 2019 gross domestic product (GDP) data from the US. The growth figure might retrace to 2.1% from 2.2% on an annualized basis. Adding to the US economic calendar will be the Michigan consumer sentiment index for April. The consumer confidence gauge may increase a bit to 97.00 from 96.90 earlier.
It should also be noted that the recent improvement in risk-tone failed to sustain as the US 10-year treasury yields are soft at 2.53%.
Technical Analysis
Despite ticking up to $1282.50 during yesterday, the bullion couldn’t hold its gain and is yet to clear a week-long horizontal barrier at $1280 in order to aim for $1285 and 100-day simple moving average (SMA) near $1291.
On the downside, eight-month-long upward sloping support-line at $1263 becomes crucial support to watch as a break of which can recall $1260 and $1257 rest-points back on the sellers’ radar.
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