Update: Gold lacked any firm intraday direction and seesawed between tepid gains/minor losses through the early North American session. The commodity was last seen hovering in the neutral territory, around the $1,870 region and had a rather muted reaction to mixed US macro releases.
Retreating US Treasury bond yields failed to assist the US dollar to capitalize on the overnight rebound from multi-month lows, instead prompted some fresh selling. This, in turn, was seen as a key factor that extended some support to dollar-denominated commodities, including gold.
That said, a generally positive tone around the European equity markets and a goodish intraday rebound in the US equity futures acted as a headwind for the safe-haven gold. Apart from this, hints that the Fed has begun debating on QE tapering further collaborated towards capping gains for the non-yielding yellow metal.
Meanwhile, a subdued/two-way price moves since the beginning of this week’s could be seen as the first sign of bullish exhaustion. However, the emergence of some dip-buying at lower levels warrants some caution before confirming that gold has topped out in the near term and positioning for any meaningful corrective slide.
Update: This Thursday, gold price is looking to extend the recovery from near the $1860 region. In the view of FXStreet’s Dhwani Mehta, XAU/USD looks to challenge three-month highs despite Fed’s tapering jitters. Gold is trending within a rising wedge formation on the four-hour chart, as markets weigh in the implications of the FOMC minutes. Also, the persisting volatility in the crypto space keeps the buoyant tone intact around gold. However, the further upside appears elusive unless the $1900 mark is recaptured on a sustained basis.
Update: Gold reversed an intraday slide to the $1,864 area and refreshed daily tops heading into the European session. The precious metal attracted some dip-buying on Wednesday and was supported by a combination of factors. As investors looked past hawkish FOMC minutes, a softer tone around the US Treasury bond yields failed to assist the US dollar to capitalize on the overnight bounce from multi-month lows. This, in turn, was seen as a key factor that drove some flows towards the non-yielding yellow metal. Apart from this, a generally softer tone around the equity markets further acted as a tailwind for traditional safe-haven assets, including gold.
That said, the uptick lacked any strong follow-through amid hints that the Fed has begun debating on QE tapering. The minutes of the April FOMC meeting revealed that several participants suggested it might be appropriate at some point to adjust the pace of asset purchases if the economy continued to make rapid progress towards the Committee’s goals. This, in turn, might keep a lid on any strong gains for the non-yielding yellow metal, warranting some…
Go to the news source: Gold Forecast 2021: XAU/USD trades with modest gains, taper talks to cap the ups…