Gold Price Analysis: Snaps two-day winning streak, still above $1,700, as DXY regains
|- Gold buyers struggle amid a light flow of news in Asia.
- Increasing odds of stimulus from China, downbeat catalysts from Pacific nations keep buyers hopeful amid broad risk-off.
- Fears of negative Fed rate, worrisome US economics add to the safe-haven demand.
- US dollar strength challenges the bullion buyers ahead of the US Jobless Claims.
Gold prices remain mildly offered around $1.714, down 0.10% on a day, during the Asian session on Thursday. The bullion recently snapped two-day winning streak as the US dollar recovers initial losses to extend the previous day’s gains.
The greenback seems to gain fresh bids from the downbeat signals from Australia and New Zealand while also cheering the increasing odds of the People’s Bank of China’s (PBOC) rate cut.
The USD earlier stepped back after comments from US President Donald Trump and Treasury Secretary Steve Mnuchin rekindled hopes of negative Fed rate. It’s worth mentioning that the Federal Reserve policymakers, including Chairman Powell, tried hard to rule out any such odds the previous day.
The US currency also seems to take the clues from the US-China tussle as well as rising fears of the coronavirus (COVID-19) wave 2.0.
That said, Dollar Index (DXY), a gauge of the greenback’s strength versus the major currencies, takes the bids near 100.26, up for the second day, by the press time.
Traders are likely to keep eyes on the US Jobless Claims for further direction while trade/virus updates will also be the key. Concerning the US data, Westpac said, “The past two months have been harrowing reading. The median forecast is for another 2.5 million claims last week and continuing claims for the prior week at 25.1 million.”
Technical analysis
Only a daily closing beyond a one-month-old descending resistance line, currently near $1,719/20, can add strength into the upside momentum towards the April month high near $1,748. Failing to do so can recall sub-$1,700 figures to the charts.
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