Gold eases from tops, up little below $1940 level

angel may

A turnaround in the equity markets extended some support to the commodity’s safe-haven status. The USD built on the post-FOMC minutes positive move and capped any strong gains for the metal. Concerns about the US economic recovery helped limit any meaningful downfall, at least for now. Gold refreshed daily lows […]

  • A turnaround in the equity markets extended some support to the commodity’s safe-haven status.
  • The USD built on the post-FOMC minutes positive move and capped any strong gains for the metal.
  • Concerns about the US economic recovery helped limit any meaningful downfall, at least for now.

Gold refreshed daily lows during the mid-European session, albeit quickly recovered thereafter and was last seen trading with modest gains, around the $1936 region.

A turnaround in the global risk sentiment – as depicted by a steep decline in the equity markets – provided a modest lift to the precious metal’s safe-haven status. The anti-risk flow was reinforced by a fresh leg down in the US Treasury bond yields, which extended some additional support to the non-yielding yellow metal.

However, some follow-through US dollar buying interest kept a lid on any strong gains for the dollar-denominated commodity, instead prompted some selling at higher levels. The greenback was back in demand after minutes from the last FOMC meeting held on July 28-29 failed to offer a clear hint of a shift to looser policy in the months ahead.

However, the uncertainty over the next round of the US fiscal stimulus and concerns about the US economic recovery amid the ever-increasing coronavirus cases held investors from placing aggressive bearish bets. This, in turn, was seen as a key factor that helped limit any deeper losses for the metal, at least for the time being.

Market participants now look forward to the US economic docket, featuring the release of Philly Fed Manufacturing Index and Initial Weekly Jobless Claims. The data might influence the USD price dynamics, which along with the broader market risk sentiment might produce some short-term trading opportunities on Thursday.

Technical levels to watch

 

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