· Gold eases as firmer U.S. Treasury yields weigh
Gold prices edged lower on Thursday as higher U.S. Treasury yields dented the metal’s appeal, although losses were limited by a weaker dollar and Federal Reserve Chairman Jerome Powell’s dovish comments.
Benchmark U.S. Treasury yields hovered near a one-year peak hit in the previous session. Higher yields increase the opportunity cost of holding non-yielding bullion.
The dollar languished near three-year lows versus riskier currencies.
Central bankers worldwide have been unequivocal that there are no plans to cut back on money-printing any time soon, or raise interest rates, but markets do not seem to be buying it
The first big real-world study of the Pfizer/BioNTech vaccine to be independently reviewed shows the shot is highly effective at preventing COVID-19, in a potentially landmark moment for countries desperate to end lockdowns and reopen economies.
· Gold and silver have slipped lower leading into the EU session
Gold and silver have moved lower overnight and the yellow metal trades conclusively under the $1800//oz level. Silver dropped half a percent in the red to trade at $27.77/oz.
ECB's Schnabel stated that the ECB will ensure that there is no unwarranted tightening of financing conditions. Fiscal and monetary policy support will remain crucial and must not be withdrawn prematurely.
Overnight the Bank of Korea kept interest rates unchanged at 0.50%. This was a unanimous decision.
Looking ahead to the rest of the session highlights include US core durable goods orders, US GDP, weekly initial jobless claims, US pending home sales and comments from ECB's Lane, de Guindos, Fed's Quarles, Bostic, Williams and RBNZ's Orr.
· Gold Price Forecast: XAU/USD weighed down by rallying US bond yields, upbeat market mood
Gold struggled to capitalize on the previous day's goodish intraday bounce and witnessed some fresh selling during the Asian session on Thursday. The underlying bullish tone in the financial markets was seen as one of the key factors that weighed on the safe-haven XAU/USD. Apart from this, the recent runaway rally in the US Treasury bond yields exerted some additional pressure on the non-yielding yellow metal. That said, a softer tone surrounding the US dollar might extend some support to the dollar-denominated commodity and help limit deeper losses, at least for the time being.
Short-term technical outlook
From a technical perspective, the commodity has been oscillating between two converging trend-lines over the past two months or so. This seemed to constitute the formation of a bullish falling wedge pattern on the daily charts. However, technical indicators on the mentioned chart have been drifting lower in the negative territory and are yet to support the constructive set-up. This makes it prudent to wait for a sustained breakthrough the wedge resistance, currently around the $1812-13 region, before positioning for any further appreciating move.
Some follow-through buying beyond the weekly tops, near the $1816 level, will reaffirm the bullish breakout and push the commodity back towards the next relevant resistance near the $1842 horizontal zone. The momentum could further get extended towards the $1852-55 supply zone en-route monthly swing highs, around the $1870 region.
On the flip side, the $1783-80 area now seems to have emerged as immediate strong support. This is followed by multi-month lows, around the $1760 region and wedge support near the $1751 level. Sustained weakness below might now accelerate the downfall towards the $1725-24 congestion zone before the metal eventually drops to the next relevant support just ahead of the $1700 mark.
Reference: CNBC, FXStreet, Kitco
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