• Overnight rebound supported by the USD retracement/weaker US bond yields.
• A modest USD uptick/stability in European equities seemed to cap additional gains.
Gold built on previous session's goodish rebound from 6-1/2 month lows and continued gaining positive traction for the second consecutive session.
The recent US Dollar corrective slide was seen as one of the key factors benefitting dollar-denominated commodities - like gold. This coupled with retracing US Treasury bond yields, with the benchmark 10-year yield falling to a one-month low level of 2.833%, provided an additional boost to the non-yielding yellow metal.
Meanwhile, lingering trade-war fears continue to weigh on investors sentiment and the same was evident from a sharp overnight fall in the US equity markets, which extended an additional supporting hand to the precious metal's safe-haven appeal.
A combination of positive factors kept the positive momentum intact and lifted the commodity to over one-week tops during the Asian session on Wednesday, albeit lacked any strong follow-through.
A goodish pickup in the USD demand over the past hour or so, coupled with a modest rebound in the European equity markets kept a lid on any further appreciating move for the commodity.
Moreover, investors also seemed reluctant to place any additional bullish bets ahead of this week's important releases, including the latest FOMC meeting minutes and the keenly watched US monthly jobs report, which would help determine the metal's next leg of directional move.
Technical levels to watch
The $1252 area now seems to act as an immediate support and is followed by support near the $1248-47 region, which if broken might negate prospects of any further recovery.
On the flip side, sustained move beyond the $1260-61 region is likely to accelerate the recovery move towards $1266 supply zone before the metal eventually aims towards testing its next major hurdle near the $1272-73 area.
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 near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.