Thursday came with some profit-taking among investors which, in turn, erased the previous day’s positive momentum towards the $1,981 area. These are the record highs retested in the wake of a more dovish Fed commentary.
The United States central bank confirmed that it will maintain rates near zero until it is confident that the economy has survived the recent events. That, in turn, underpinned the non-yielding gold market.
Investors decided to look past the latest FOMC policy update. In that context, the USD staged a somewhat strong intraday rebound from more than 2-years; and put some pressure on the dollar-denominated commodity. Even the current downfall experienced in the US Treasury bond yields; and a steep turnaround in the global risk sentiment did not impress the bulls. Also, it did not revive gold’s perceived haven demand.
For now, it will be quite interesting to see if the precious metal can attract any buying interest at lower levels. On the other hand; today’s fall may mark the start of a near-term corrective slide amid the already overstretched conditions on the daily chart.
Nonetheless, the US dollar price dynamics may continue to play an integral role in affecting the commodity’s momentum. The focus now shifts to the advanced US GDP report. The biggest economy in the world is anticipated to have somehow collapsed by a staggering 34.1%; in the second quarter of this year.
Any meaningful divergence from these expected figures may increase volatility and help investors to catch some significant trading opportunities later in the early North American session.