Gold flat as dollar advances on rising Europe virus woes
· Spot gold was little changed at $1,734.81 per ounce by 0130 GMT. U.S. gold futures were steady at $1,732.90 per ounce.
· The dollar hit a fresh four-month high to the euro on Thursday amid worries about Europe’s third COVID-19 wave and potential U.S. tax hikes.
· U.S. Treasury yields dipped after the Treasury saw average demand for an auction of five-year notes, with the market appearing to stabilize after benchmark yields reached one-year highs last week.
· Lower returns on Treasury bonds reduce the opportunity cost of holding non-yielding bullion.
· New orders for key U.S.-made capital goods and shipments unexpectedly fell in February.
· The timeline for when the Fed will start to raise rates will depend on what is happening with the economy, New York Federal Reserve Bank President John Williams said on Wednesday.
· Chicago Fed President Charles Evans also said the central bank will not reduce monetary policy accommodation until it sees actual improvements.
· Treasury Secretary Janet Yellen on Wednesday said U.S. banks look healthy enough to be allowed to pay dividends and repurchase stock.
· China will maintain credit support continuity and stability for small and micro firms, the country’s central bank said on Thursday.
· SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 1,043.03 tonnes on Wednesday from 1,045.36 tonnes Tuesday.
· '5% in gold, 5% in bitcoin': Jim Cramer tells investors to drop 'half of their gold'
CNBC's Jim Cramer just changed his mind on the gold versus bitcoin debate, telling investors that instead of holding 10% of their portfolios in gold, it was time to switch to the 5% gold, 5% bitcoin allocation.
"I have, for years, said that you should have gold ... but gold let me down," Mad Money's host Cramer said during his appearance on the Pomp Podcast. "Gold is subject to too many vicissitudes. It's subject to mining issues. It's frankly subject to failing in many cases."
· Gold Price Analysis: XAU/USD set for additional losses while below the $1742/44 zone
Gold (XAU/USD) struggles for direction and remains confined in a range. In the view of FXStreet’s Haresh Menghani, the formation of a rectangle warrants caution before placing directional bets.
“From a technical perspective, the recent range-bound price action constitutes the formation of a rectangle on hourly charts. The rectangle might still be categorized as a bearish continuation pattern that marks a brief pause in the trend.”
“The negative outlook is reinforced by the fact that the commodity has repeatedly struggled to find acceptance above the $1742-44 supply zone. That said, it will still be prudent to wait for a sustained move in either direction before placing any aggressive bets.”
“The lower boundary of the trading range, around the $1720 region might continue to act as immediate support. A convincing break below will be seen as a fresh trigger for bearish traders and turn the commodity vulnerable to accelerate the slide towards the $1700 mark.”
“The $1742-44 region remains a strong hurdle for bullish traders. A sustained strength beyond, leading to a subsequent breakthrough the trading range resistance, around the $1748 level, might prompt some short-covering move and push the XAU/USD back towards the $1760-65 strong horizontal support breakpoint.”
· Gold Price Analysis: XAU/USD yearns for acceptance above $1735 ahead of US data
Gold (XAU/USD) trades on the defensive ahead of the European open, wavering back and forth in a $7 range around $1735.
The upside attempts in the yieldless gold appear limited by the renewed buying interest seen around the US Treasury yields, which propels the dollar back towards the four-month highs across its main competitors.
After a brief corrective stint, the US rates have resumed their uptrend, thanks to the expectations of the Biden administration’s infrastructure spending plans. Meanwhile, encouraging comments from US Treasury Secretary Janet Yellen on the bond market also helped revive the bullish bias in the returns on the market.
The strength in the greenback could be also attributed to the rising haven demand, as surging covid cases in Europe prompt investors to seek shelter in the buck. Looking ahead, gold could continue its range play, awaiting fresh directional break from the key US economic data, including the US GDP revision, Core PCE Price Index and the weekly Jobless Claims. Markets will also pay attention to a slew of Fedspeak for fresh hints on the inflation and policy outlook.
From a near-term technical perspective, gold needs acceptance above the $1735 level, which is the confluence of the 21 and 50-simple moving averages (SMA) on the four-hour chart.
The next barrier for the XAU bulls would be the daily high at $1739, beyond which the weekly top of $1747 could be in sight.
The Relative Strength Index (RSI) trades flat just above the midline, keeping the buyers hopeful.
If gold traders fail to find a sustained footing above the $1735 level, sellers could return, targeting the 100-SMA support at $1723. The next downside cushion for the XAU bulls is seen at $1717, the previous week low.
· Palladium fell 0.2% to $2,630.32, silver rose 0.1% to $25.10 and platinum was up 0.2% at $1,169.96.
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