- Gold price gains positive traction on Thursday amid sliding US bond yields and a weaker USD.
- Geopolitical tensions and China’s economic woes also contribute to the intraday positive move.
- The prevalent risk-on environment caps any further upside for the safe-haven precious metal.
Gold price (XAU/USD) builds on the previous day’s bounce from the $1,970-1,969 region, or a one-week low and gains some follow-through traction on Thursday. The precious metal sticks to its modest gains through the early part of the European session, albeit lacks bullish conviction and remains below the $2,000 psychological mark. The upbeat mood across the global equity markets is seen as a key factor acting as a headwind for the precious metal.
That said, a further decline in the US Treasury bond yields and the US Dollar (USD), led by expectations that the Federal Reserve (Fed) may be done raising interest rates, remains supportive of the bid tone surrounding the non-yielding Gold price. Apart from this, the risk of a further escalation in the Israel-Hamas conflict, along with the worsening economic conditions in China, supports prospects for a further appreciating move for the safe-haven yellow metal.
Daily Digest Market Movers: Gold price lacks bullish conviction despite sliding US bond yields, weaker USD
- Gold price struggles to capitalize on its modest intraday uptick amid the prevalent risk-on environment and the uncertainty over the Federal Reserve’s future rate-hike path.
- The Fed decided to keep the key overnight interest rates unchanged for the second time in a row and noted that financial conditions may be tight enough already to control inflation.
- The markets now expect the US central bank to start cutting rates in June 2024, which leads to a further steep decline in the US Treasury bond yields and undermine the US Dollar.
- The yield on the rate-sensitive two-year US government bond falls to its lowest level since September 8, while the benchmark 10-year Treasury yield moves away from the 5% threshold.
- The Fed upgraded its assessment of the economic activity and acknowledged the US economy’s unexpected resilience, keeping the prospect of another hike on the table.
- On the geopolitical front,Gaza’s largest refugee camp was hit by a series of powerful explosions, which the Israeli military cliams to have killed a Hamas commander linked to the October 7 attacks.
- Bolivia cut its diplomatic ties with Israel as a result of civilian losses caused by what it describes as aggressive and disproportionate military action in Gaza.
- Israel’s Prime Minister refused any avenue for a ceasefire, saying that such appeals were a call for Israel to surrender to Hamas, to surrender to terrorism, to surrender to barbarism.
- The market focus now shifts to the US monthly employment details – the NFP report – due on Friday, which should provide some meaningful impetus to the precious metal.
Technical Analysis: Gold price manages to hold comfortably above $1,970, or a one-week low set on Wednesday
From a technical perspective, the $2,000 mark is likely to act as an immediate strong barrier. This is followed by a multi-month top, around the $2,008-2,010 area, which if cleared decisively has the potential to lift the Gold price to the next relevant barrier near the $2,022 region. On the flip side, the overnight swing low, around the $1,970 region, now seems to offer some support to the XAU/USD. Some follow-through selling will expose the $1,964 intermediate support before the commodity drops to the $1,954-1,953 zone.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | CAD | AUDSource Link
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