- Gold prices ease from $1,950.90 after a two-day winning streak.
- Risk-tone remains positive with Wall Street cheering tech recovery during the pre-ECB optimism.
- Easing virus-led lockdown in Tokyo, news concerning Tiktok and no more negatives from Chinese data add strength to positive mood.
- A light calendar will entertain traders ahead of the ECB.
Update: Gold is gearing up toward the all-important decision by the Federal Reserve. Will details on allowing inflation to overheat send XAU/USD higher? The technical situation looks improved after the precious metal bounced off the 50-day Simple Moving Average and momentum on the daily chart turned positive. See:Preview: How the Fed could drown markets while trying not to rock the boat
Gold prices struggle to keep the previous run-up while declining to $1,945.80 during the early Thursday morning in Asia. The yellow metal rose to the highest since September 03 on Wednesday before taking a U-turn from $1,950.90. While market sentiment remains mostly positive, a lack of catalysts and the pre-ECB cautiousness could be considered as reasons for the bullion’s recent pullback.
Risk-on pause, not tamed…
Although traders await more clues to extend Wednesday’s market reversal, S&P 500 Futures print 0.30% gains to 3,404 by the press time. The risk barometer recovered from a one-month low on yesterday as talks surrounding the European Central Bank (ECB) policymakers’ optimism and TikTok parent’s plea to not push for the entire sale to the US gained momentum. Also adding to the market’s optimism could be welcome prints of the US JOLTS Job Openings and an absence of disappointment from China’s inflation numbers.
Furthermore, the recent news that Tokyo is up for notching one level off its highest alert conditions, due to the coronavirus (COVID-19), adds to the market’s optimism.
Other than the risk-positive environment, the US dollar’s declines for the first time in the last seven days also contributed to the bullion’s positive performance.
It should, however, be noted that the Sino-American tension is still on in the background while uncertainty surrounding the Brexit deal and the US aid package continues to hurt the risk sentiment. As a result, buyers await a strong positive message from the ECB, which is less likely, to keep the recent rise.
Technical analysis
Other than the anticipated challenges to the risk, the 21-day SMA level of $1,948 also questions the precious metal’s immediate upside attempts. Hence, the odds of again witnessing $1,900 on the chart can’t be ruled out.
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: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.