- Weaker US bond yields weighed on the USD and helped regain some traction.
- Cautious mood benefited traditional safe-haven assets and remained supportive.
- US-China trade optimism seemed to be the only factor capping any strong gains.
Gold edged higher for the second consecutive session on Friday, albeit remained well within a familiar trading range held over the past two weeks or so.
The precious metal extended its recovery move from the post-FOMC swing losses to over one-month lows and continued gaining some follow-through traction on Friday amid a combination of supporting factors.
Weaker US bond yields/USD extend some support
Given the uncertainty over the next move by the Fed, some renewed weakness in the US Treasury bond yields kept the US Dollar bulls on the defensive and extended some support to the non-yielding yellow metal.
This coupled with the prevalent cautious mood, which tends to benefit traditional safe-haven assets, provided an additional boost to Gold and remained supportive of the move back above the key $1500 psychological mark.
Despite the uptick, bulls lacked any strong conviction amid the recent optimism over the resumption of the US-China trade talks. Hence, the incoming trade-related headlines might continue to influence the price action.
Investors now look forward to the lower-level trade talks between the US and China in Washington, which will lay the groundwork for high-level discussions in early-October and eventually provide some meaningful impetus.
This coupled with a scheduled speech by Boston Fed President Eric Rosengren - later during the US session - might further assist investors to grab some short-term trading opportunities on the last day of the week.
From a technical perspective, it will be prudent to wait for a sustained breakthrough the recent trading range before placing any aggressive directional bets amid absent relevant market moving economic releases from the US.
Technical levels to watch
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
AUD/USD jumps to mid-0.6500s on weaker USD
AUD/USD touches a near two-week top during the Asian session on Monday as a sharp pullback in the US bond yields prompts some USD profit-taking. Moreover, the upbeat market mood supports the risk-sensitive Aussie amid the RBA's hawkish stance.
USD/JPY languishes below 154.00 on USD profit-taking
USD/JPY slides back closer to last week's swing low, below the 154.00 mark during the Asian session on Monday. Retreating US bond yields drags the USD away from a two-year top high and drives flows towards the lower-yielding JPY, though the BoJ uncertainty could limit losses for the currency pair.
Gold touches near three-week high on sliding US bond yields, USD weakness
Gold price builds on Friday's positive move beyond the $2,700 mark and climbs to a nearly three-week high on Monday. The USD pulls back from a two-year high on the back of retreating US bond yields and benefits the commodity.
Elections, inflation, and the bond market
The Federal Reserve believes inflation is no longer a concern for consumers and the time has come to ensure the rate of change of prices does not decline any further.
Read more
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.