- Gold eases from intraday top but lacks bearish momentum.
- Covid woes, reflation fears favor the US dollar’s corrective pullback.
- S&P 500 Futures print mild losses despite Wall Street’s positive performance.
- China PMI, risk news will be crucial to follow.
Gold steps back from intraday high while flashing $1,772 as a quote amid Friday’s Asian session. In doing so, the yellow metal rejects the initial consolidation of the biggest losses in 14 days marked on Thursday.
Mixed clues, dull markets confuse gold traders…
Although mildly negative S&P 500 Futures and sustained recovery of the US dollar index (DXY) seem to back the gold sellers, BioNTech’s hopes of finding a vaccine for Indian-origin covid strain seem to battle the moves.
Also portraying a mixed market scenario is the sustained strength of the US Treasury yields and reflation fears versus the expectations of further stimulus and upbeat US data.
It should be noted that a lack of major data/events in Asia adds to the sluggish markets while weighing on the bright metal’s prices of late.
However, China’s official PMIs for April and the return of Japanese traders after Thursday’s off could soon recall momentum traders. In a case where Beijing keeps printing upbeat figures, the bullion may witness a corrective pullback, failures to do so, which is widely anticipated, could keep the sellers in the driver’s seat.
Technical analysis
Although a downside break of the monthly support line, now resistance around $1,796, keeps gold sellers hopeful, a confluence of 21-day and 50-day EMA near $1,764 restricts the commodity’s short-term downside. It’s worth mentioning that a 200-day EMA level of around $1,792 adds to the upside filters.
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