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Gold faces headwinds from strong China factory activity data

· Gold prices inched lower on Wednesday as data showing a faster-than-expected growth in China’s factory activity weighed on the metal’s safe-haven appeal, while a surge in U.S. Treasury yields added further pressure.

· Spot gold was down 0.1% to $1,683.56 per ounce by 0129 GMT. U.S. gold futures were flat at $1,685.10 per ounce.

· China’s factory activity expanded at a faster-than-expected pace in March, official data showed, as factories that had closed for the Lunar New Year holiday resumed production to meet improving demand.

· The U.S. 10-year Treasury yield rose as far as 1.776% on Tuesday, its highest since Jan. 22.

· Higher returns on bonds increase the opportunity cost of holding non-yielding bullion.

· U.S. consumer confidence surged in March to its highest level since the start of the COVID-19 pandemic, supporting views that economic growth will accelerate in the coming months.

· Federal Reserve policymakers are optimistic about the U.S. economic outlook as more Americans are vaccinated and government aid gets to households and businesses, and they are not going to stand in its way.

· The International Monetary Fund will raise its forecast for global economic growth in 2021 and 2022 after last year’s 3.5% contraction, IMF Managing Director Kristalina Georgieva said on Tuesday.

· SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.1% to 1,037.50 tonnes on Monday from 1,036.62 tonnes on Friday.

· Gold Price Forecast – Gold Markets Continue to Look Very Sick

Gold markets have shown themselves to be rather negative during the trading session on Tuesday as we have broken through the $1700 level yet again.

Gold markets have really struggled at this point, breaking through the $1700 level quite handily as the US dollar continues to strengthen against most currencies. As long as yields rise in America, this is going to continue to be a major problem for the gold market. With that in mind, I believe that we are likely to see a lot of noise in this general vicinity but if we do break down to a fresh, new low, that could send this market into a bit of a tailspin. At that point, I would anticipate that the gold market goes looking towards the $1500 level which is a major support level underneath.

On the other hand, if we were to turn around and take out the $1750 level, then it would be bullish enough to have me thinking that gold had further to go to the upside and perhaps we could start buying again. This needs to be accompanied by a falling US dollar and more importantly falling US yields. Right now, that does not look likely to happen so therefore it is not really on my radar. I believe it is only a matter of time before gold breaks down and we go looking to much lower levels.

The size of the candlestick is rather bearish, but we have seen a little bit of a fight at these lows. Whether or not we can hang on is a completely different story, and it certainly looks as if the downward pressure continues. I feel at this point it is only a matter of time, so I am looking at short-term rallies as opportunities to sell the gold market, as the pressure continues to mount on the yellow metal.

· Gold Price News and Forecast: XAU/USD stays pressured below $1,700 amid cautious markets

Gold Price Analysis: Upside correction from daily support on the cards?

As per the prior analysis, Gold Price Analysis: XAU/USD bears taking control, eyes on a breakout, &, Gold Price Analysis: XAU/USD suffers at the hands of the US 10-year yield spiking, and more recently, Gold Price Analysis: Bears attacking critical weekly support, the bears are keeping the momentum going in Asia.

Gold Price Analysis: XAU/USD stays pressured below $1,700 amid cautious markets

Gold prints a three-day losing streak while holding lower ground near $1,685 amid the initial Asian session trading on Wednesday. The yellow metal dropped heavily on Tuesday after the US dollar index (DXY) marked a fresh high since early November 2020. The downside move gets extra help from geopolitical headlines recently while cautious sentiment ahead of the key data/events also weighs on the bullion prices.

· Silver was steady at $24.01, while platinum rose 0.5% to $1,160.05 and palladium was up 0.7% at $2,607.04.

Reference: CNBC, FXEmpire, FXStreet