Gold prices attracted fresh buyers on Wednesday, supported by a modest pullback in the US dollar from a one-week peak. Concerns about economic slowdown and geopolitical risks provided further support to the commodity. However, a potential recovery in US bond yields could strengthen the USD and limit gains for gold, which is a non-yielding asset.
On Thursday, gold prices saw some dip-buying during the Asian session, halting the retracement slide from the $2,600 mark, which was a fresh all-time peak reached the previous day. The US dollar trimming some of its intraday gains to a one-week high played a key role in supporting gold. Economic slowdown fears in the US and China, along with geopolitical risks from conflicts in the Middle East, continued to benefit the safe-haven precious metal.
The Federal Reserve’s decision to lower the benchmark interest rate by 50 basis points and indicate further rate cuts this year raised uncertainty about the future trajectory of interest rates. This led to a goodish US dollar recovery, causing gold prices to fade from their post-FOMC spike to a record high. Fed Chair Jerome Powell’s comments during the press conference also contributed to a rise in US Treasury bond yields, supporting the USD.
In the technical outlook, gold price bulls have the upper hand as long as the resistance breakpoint of $2,532-2,530 holds. A slide could find support near previous cycle highs before potentially testing the $2,500 psychological mark. On the upside, immediate hurdles lie around the $2,577-2,578 region, with a breakout paving the way for a challenge to trend-channel resistance at $2,610-2,612.
The US dollar’s performance against major currencies was mixed, showing a slight gain against the Japanese Yen. The heat map displayed the percentage changes of major currencies against each other, giving an overview of the current exchange rate movements. This information is crucial for traders and investors looking to make informed decisions in the foreign exchange market.
Overall, gold prices continue to be influenced by a variety of factors, including USD movements, economic concerns, geopolitical risks, and Fed policy decisions. Traders are advised to monitor these developments closely and watch for key levels of support and resistance to determine potential trading opportunities in the gold market.
