- Gold in search of fresh direction after $50 move post-Fed rate cut.
- Stalled USD rebound and Treasury yields slump continue to underpin.
- Broad market sell-off amid coronavirus to keep the upside in check.
Having witnessed a volatile early Asian session, gold (futures on Comex) is stabilizing near the mid-1550s, as investors await fresh catalysts for the next direction in the prices.
The yellow-metal opened with a $45 bullish opening gap this Monday, as traders sold-off the greenback across its main competitors, responding to the surprise rate cut delivered by the US Federal Reserve (Fed) late Sunday.
The dollar sank in tandem with the US Treasury yields, as the demand for the US bonds rose, with markets unwilling to buy into the Fed rate cut decision that is said to cushion the blow of the coronavirus impact on the economy.
Gold, however, failed to sustain at higher levels and fell as low as $1524 to close the gap, as investors locked-in gain after the upsurge. The buyers re-emerged around the latter, prompting a recovery in the commodity towards $1550, as the broad US dollar rebound stalled.
Markets now remain in a wait and see mode ahead of the G7 and EU Finance Ministers’ economic response to the virus outbreak, which will have a significant impact on the risk sentiment and the dollar trades, eventually influencing gold prices.
Gold technical levels to watch
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