XAU / USD drops below $ 1,900 on rebound in US dollar
Update: Gold (XAU / USD) remains lower for the second day in a row despite a recent rebound to intraday low 0.17% on a day around $ 1,897 ahead of Wednesday’s European session. The yellow metal benefited from the decline in the US dollar earlier in Asia before falling $ 1,902.
Gold sellers applaud the rebound in the US dollar, supported by low Treasury yields, amid a gloomy trading session. That said, the US Dollar Index (DXY) is regaining its bullish momentum, triggered Tuesday night, as the 10-year US Treasury yield struggled around 1.61% at press time.
Upbeat headlines suggesting the U.S.-China trade deal and support from global institutions such as the International Monetary Fund (IMF) and the World Health Organization (WHO) appear to be reducing demand for gold as a safe haven.
Technically, gold sellers are attacking the 50% Fibonacci retracement of the weekly rally, around $ 1,899, ahead of key support including late January highs near $ 1,875.
Previous updates …
Gold (XAU / USD) remains moderate at around $ 1,900 Wednesday morning. The yellow metal fell the most in three weeks the day before, before rebounding on the weekly run 50% Fibonacci retracement.
While firmer Treasury yields test gold buyers, strong technical support and a lack of market movement appear to challenge sellers despite the weak US dollar. That said, the US Dollar Index (DXY) does not extend Tuesday’s recovery moves, down 0.06% to 89.76 at press time as markets are still unconvinced of the woes. of reflation / reduction in a context of economic optimism. In addition, news suggesting further stimulus from the United States, as well as a group led by the International Monetary Fund (IMF), the World Health Organization (WHO) and other institutions, also weighs in on the US dollar and promote gold prices.
Looking ahead, a light schedule and cautious sentiment ahead of Friday’s major US nonfarm jobs may keep the metal chained, but the Fedspeak may keep traders entertained in the short term.
The price of gold was in the hands of bears in London after an initial peak to hit new highs at $ 1,916.61 according to XAU / USD.
Gold ended the North American session down 0.35%, resting around the 50% average reversion mark of the last daily uptrend at $ 1,899 and slightly above the lows of the day of $ 1,892.44.
In early Asia, the price of gold is flat and better offered as it tries to hold onto the psychological level of $ 1,900.
Gold was under pressure despite a weaker DXY index that was only able to achieve a 0.1% gain at the end of Wall Street after data showed US manufacturing activity recovered on last month but showed a weak employment segment of the ISM report.
“Employment fell to 50.9 from 55.1 previously – with some suggesting that the increase in unemployment benefits is weighing on the labor supply,” analysts at ANZ Bank explained.
Subsequently, the DXY fell to a low of 89.6630, after hitting 90.447 on Friday when a measure of US inflation closely watched by the Fed recorded its largest annual increase since 1992.
However, the overall strength of US manufacturing data weighed on investor demand for gold as the bond market fell, pushing 10-year Treasury yields up 2 basis points to over the day’s highs in the 3.7% rally, reducing demand for non-interest bearing bullion.
Gold technical analysis
According to Graph of the week Expected gold price (XAU / USD) rallied to a new daily high after retesting the support structure. However, he failed to expand with momentum and began to carve out a bearish closing candle for the day.
As identified during the previous New York session on Tuesday, the price of gold is held at a critical 15 minute support level.
Live market analysis
In the event of a breach of support, there is the prospect of downward extension for the day ahead in accordance with hourly price action:
That being said, the territory below current support is dangerous for bears given the historic level of demand over the past week.
Any new low in the current bear cycle could be short lived.