· Gold edged lower on Thursday as investors booked profits from sharp gains in the previous session, but prices held above the $1,700 an ounce level on the promise of more U.S. stimulus measures to ease the economic blow from the coronavirus crisis.
Spot gold fell 0.2% to $1,710.78 per ounce by 0520 GMT, after Wednesday's more than 1.5% jump. U.S. gold futures were little changed at $1,738.90 per ounce.
· "The market is probably more inclined to take profit on gold, simply because they are nearing the highs of the recent range," said Stephen Innes, chief market strategist at financial services firm AxiCorp.
"The U.S. kicked in more stimulus, which is really positive for gold because it increases fiscal deficits in the country. And with these low interest rates staying low, this is just a welcoming relief."
· Against key rivals, the dollar climbed to a more than two-week peak earlier in the session, making gold costlier for investors using other currencies.
Asian stock markets rose as the combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy helped calm nervous markets.
· The U.S. House of Representatives expects to pass a nearly $500 billion coronavirus relief bill on Thursday but will put off any decision on changing its voting rules to avoid a potential partisan fight.
"In a nutshell, gold investors are more impressed with the bullish aspect of more fiscal spending than with the bearish impact of higher equities," Innes said.
The pandemic has prompted governments and central banks around the world to unleash unprecedented fiscal and monetary support for economies battered by the virus.
· The European Central Bank said on Wednesday it would let banks post collateral that was downgraded to junk during the outbreak to prevent a credit squeeze in the euro zone.
Gold tends to benefit from widespread stimulus measures from central banks since it is seen as a hedge against inflation and currency debasement.
· Market participants also awaited U.S. initial weekly jobless claims data due at 1230 GMT.
· Meanwhile, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.9% to 1,042.46 tonnes on Wednesday.
· Gold Price Prediction – Prices Rally in Tandem with Riskier Assets
Gold prices moved higher and are poised to test resistance near the 1,747. Support near the 10-day moving average at 1,698. Short term momentum has whipsawed and turned positive as the fast stochastic generated a crossover buy signal. This happened as the fast stochastic is printing a reading of 72. Medium-term momentum was turning negative but whipsawed and turned positive. The MACD (moving average convergence divergence) histogram is still printing in the black but now the trajectory is rising which points to higher prices.
· Gold Price Analysis: Recaptures $1,700 and surpasses three technical hurdles, levels to watch
On its way up, XAU/USD has achieved three technical feats on the four-hour chart.
The first is that momentum turned positive for the first time in nearly a week. The second is that gold popped past the previous daily weekly high set on Monday, setting a higher high. And finally, the precious metal surpassed the 50 Simple Moving Average, completing the trio of the 50, 100, and 200 SMAs.
The fresh high of $1,706 is immediate resistance. It is followed by $1,726, which held the pair down when it traded on higher ground. Finally, the seven-year peak of $1,742 awaits XAU/USD.
Support is at $1,680, which provided support last week, followed by $1,640, a support line from early April, and finally, $1,620, which is where the 200 SMA hits the price.
· Gold prices seen higher at $1800 by end-2020 – Saxo Bank
Ole Hansen, Head of Commodity Strategy at Saxo Bank, said in its latest client note, gold prices could push higher to $1800/ troy ounce by the end of this year.
Gold’s future looks exceptionally bright in the long-term as inflation fears pick up as a result of the massive amount of liquidity that has flooded markets within the last month.
Sees gold prices pushing to $1,800 an ounce by the end of this year, hitting a new record high by 2021 and sees a long-term gold price above $4,000 an ounce.
The repercussions of what we're going through right now with the pandemic and the aftermath is going to be something that's going to be felt for at least a generation and potentially beyond.”
· Among other precious metals, palladium rose 0.6% to $1,949.18 an ounce.
Platinum climbed 0.4% to $760.35 per ounce, while silver gained 0.6% to $15.24 per ounce.
Reference: Reuters, FX Street, FX Empire
Thai
Eng