Axiory Global Research Team
Axiory Global Ltd.
It has been a rollercoaster day for gold so far on Thursday as the precious metal advanced 1% during the London session, only to give up all the gains and turn to sharp losses later in the day,
At 17.00 CET, gold was down 0.6% on the day, changing hands at 1,465 USD, down from 1,485 USD reached earlier in the day.
At first, gold soared sharply after the ECB upgraded its inflation forecast. Over the medium term, the inflation rate will increase, Lagarde said. Additionally, she noted The ECB's highly accommodative stance will continue for a prolonged period until inflation rises, and said that incoming economic and survey data point to some stabilization in the slowdown of economic growth in the euro area.
However, shortly after, the US President Donald Trump tweeted that (the US) is "Getting VERY close to a BIG DEAL with China. They want it, and so do we!". Stocks skyrocketed higher more than 1% within minutes, while gold was smacked hard and dropped 20 USD. Sentiment improved sharply, which benefited riskier assets and undermined safe havens, such as gold or the yen.
Technically speaking, today's reversal doesnt look very gold for the near future and bears might push the price further lower. The first stronger support is near 1,460 USD, where the November uptrend line is located.
If this level is taken out, further drop toward the current cycle lows of 1,450 USD could occur.
Alternatively, should the bullion recover, the first resistance seems at around 1,472 USD and afterward at today's highs at 1,485 USD.
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