Gold Price Analysis: XAU/USD regains above $1,700 even as S&P 500 Futures wobble
|- Gold refreshes intraday high following a bounce off $1,705.84.
- US Treasury yields pause rally near multi-month top, S&P 500 Futures struggle to extend Wednesday’s recovery.
- Biden’s infrastructure spending gets rejection from business lobby, fresh lockdown in Canada, France jostles with mixed vaccine news.
- US-China tussle, downbeat China PMI also weigh on the sentiment.
A successful reversal from $1,705 enables the gold buyers to extend the previous day’s recovery moves to $1,713.50, up 0.34% intraday, during early Thursday. In doing so, the yellow metal cheers a pause in the US Treasury yields rally and sluggish S&P 500 Futures.
Following its jump to the highest since January 2020, the US 10-year Treasury yield refrains from refreshing the multi-day top. On the contrary, the key bond coupon recently drops one basis point (bp) to 1.73%. Also portraying the sluggish mood in the market could be S&P 500 Futures that seesaw around 3,960-65 off-late.
While tracing the reasons, US business leaders’ criticism of President Joe Biden’s $2.25 trillion and fresh coronavirus (COVID-19) activity restrictions in France and Canada’s Ontario seem to play their roles. Also on the risk-negative side could be the West versus China tension and downbeat Caixin Manufacturing PMI from Beijing.
Alternatively, the US Food and Drug Administration’s (FDA) approval of the Rapid Antigen "Paper Strip" tests for over-the-counter use joins Pfizer’s 100% vaccine efficacy for children to keep the traders hopeful. Additionally, no more virus-led lockdown in Australia and welcome trade and retail sales figures from the Oz nation favor the optimists.
Amid these plays, the US dollar index (DXY) struggles for a clear direction and may look to the US ISM Manufacturing PMI data for March ahead of American traders’ reaction to Biden’s plan and likely fears of its rejection.
Read: ISM Manufacturing Purchasing Managers’ Index March Preview: Consumer confidence reinforcement
Technical analysis
Although “double-bottom” around $1,677 challenges gold sellers, the yellow metal needs to cross a two-month-old falling trend line, at $1,724, before recalling the buyers.
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