- Gold prices carry bounce off $1,901.52, the lowest in two weeks.
- US dollar gains, mixed sentiment triggered the bullion’s biggest daily slump since April 2013.
- Risk catalysts to keep the driver’s seat ahead of the US CPI data.
Gold picks up the bids near $1,926.70 during the pre-Tokyo Asian session on Wednesday. The bullion dropped by around $120 the previous day, marking the biggest drop since late-April 2013, amid market’s rush to the US dollar. Though, the recent risk reset seems to have favored the pullback moves.
Consolidation or a trend change?
Although challenges to the US-China relations and uncertainty surrounding the American stimulus stay on the table, the market’s profit booking from gold’s magnanimous surge is less likely to defy the bulls unless any positive headlines.
Recently, Fox Business News (FBN) cited the US House Republican Leader Mitch McConnell to suggest no coronavirus (COVID-19) relief talks by the policymakers could be undertaken on Tuesday. On the other hand, the White House Adviser Larry Kudlow’s statement that China is fulfilling trade obligations can’t justify the Trump administration’s executive orders sanctioning officials from Beijing and the moves to term goods from Hong Kong as “Made in China”. It should also be noted US President Donald Trump also said that phase one deal with China means “very little” to him. Further, the Republican leader’s rhetoric to rekindle vaccine hopes also fails to convince the market optimists.
The reason could be traced from the fresh coronavirus (COVID-19) case in New Zealand and a sustained, but the recently slow, rise in the news cases in Australia and the US.
Against this backdrop, S&P 500 Futures follow Wall Street’s footsteps while declining to 3,333, down 0.07% on a day.
Looking forward, traders will keep eyes on the risk catalysts wherein the US stimulus talks and Sino-American news may join virus updates to occupy the front rows. Additionally, the US Consumer Price Index (CPI) for July, expected to rise from 0.6% to 0.8% on YoY, will also be the key to watch.
Technical analysis
An ascending trend line from March, at $1,867 now, restricts the yellow metal’s downside past-$1,900 nearby support. However, the bulls are less likely to regain controls unless the quote rises past-$2,000 mark.
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
![EUR/USD stays below 1.1100, looks to post weekly losses](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/european-euro-coin-on-top-of-american-dollar-bill-11292130_XtraSmall.jpg)
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
![GBP/USD struggles to find a foothold, trades near 1.3150](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-157771037_XtraSmall.jpg)
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
![Gold retreats toward $2,500 ahead of the weekend](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-bars-50657756_XtraSmall.jpg)
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
![Week ahead – Investors brace for NFP amid Fed rate cut speculation](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/america-back-to-work-gm178972493-25143312_XtraSmall.jpg)
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
![Easing Eurozone inflation to back an ECB rate cut in September](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/Eurozone/eu-flags-flying-at-the-european-commission-building-brussels-belgium-24759579_XtraSmall.jpg)
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.