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·         Gold prices fell on Wednesday, from a two-week high hit in the previous session, as an array of strong data from the United States and increased COVID-19 vaccinations lifted hopes of a quick economic recovery, weighing on the metal’s safe-haven appeal.

 

·         Spot gold was down 0.3% to $1,737.75 per ounce by 0354 GMT. U.S. gold futures slipped 0.3% to $1,738.60 per ounce.

 

·         “Gold is being pressured by a little bit of profit taking after a series of strong U.S. data that indicated a quick economic recovery,” said Stephen Innes, chief global market strategist at financial services firm Axi.

 

·         Bullion prices had jumped on Tuesday to their highest since March 25 at $1,745.15, as U.S. Treasury yields fell and the dollar slipped to a two-week low against a basket of currencies.

 

·         “However, the softening of the yields points towards a situation where central banks around the globe will remain dovish and that will support gold at least in the medium term,” Innes said.

 

·         In the latest spree of strong economic data, U.S. job openings rose to a two-year high in February while hiring picked up on strengthening domestic demand amid increased COVID-19 vaccinations and additional pandemic aid from the government.

 

·         The International Monetary Fund also raised its outlook for global economic growth, forecasting worldwide output would rise 6% this year.

 

·         SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.4% to 1,029.04 tonnes on Tuesday from 1,032.83 tonnes on Monday.

 

 

 

·         Gold and silver trade slightly lower heading into the EU open

 

Gold and silver trade marginally lower heading into the European cash equity open. Gold is 0.13% down at $1741.70oz while silver has lost 0.16% and trades near $25.10/oz.

 

There were some comments from US President Biden near the U.S. close. He said he will not be telling the Federal Reserve what to do, preserving their independence. He also said the good news is that vaccinations are progressing quickly.

 

Over in Japan PM Suga says a snap election before the end of September is "a possibility". He said, “There’s certainly a chance of dissolving parliament before the LDP leadership race,”.

 

·         U.S. Mint sells 412K ounces of gold coins in Q1; best start to the year since 1999

 

·         Gold Price Analysis: XAU/USD fails at $1745 as cautiousness reigns ahead of the FOMC minutes

Gold witnessed a modest pullback from the $1,745-46 supply zone during the Asian session on Wednesday and eroded a part of the overnight gains to two-week tops. As FXStreet’s Haresh Menghani notes, XAU/USD bulls turn cautious ahead of FOMC minutes.

“Investors remain convinced that stronger fundamental will force the Fed to raise interest rates sooner than anticipated. Any clues that the conditions to begin tightening were discussed at the meeting held on March 16-17 should weigh on the non-yielding yellow metal.”

“The recent rebound from multi-month lows faltered near the $1,745-46 heavy supply zone. This should now act as a key pivotal point for intraday traders, above which the commodity is likely to accelerate the move towards the $1,760-65 support breakpoint, now turned resistance. A sustained move beyond will validate a bullish double-bottom formation near the $1,677-76 region and set the stage for additional gains.”

“The $1,720 horizontal level is likely to protect the immediate downside. This is followed by the $1,700 mark, which if broken decisively will negate any positive bias and turn the commodity vulnerable to retest the $1,677-76 region.”

 

·         Gold Price Futures (GC) Technical Analysis – Price Action Suggests Trader Reaction to $1746.90 Sets the Tone

The direction of the June Comex gold market on Wednesday is likely to be determined by trader reaction to $1746.90.

Gold futures are edging lower early Wednesday after touching its highest level since March 25 the previous session. On Tuesday, gold jumped as the U.S. Dollar fell to a two-week low against a basket of currencies as traders booked profits in the greenback after a strong March and as a drop in Treasury yields from recent peaks put pressure on the greenback while shaking out a few of the weaker shorts in the gold market.

 

Daily Swing Chart Technical Forecast

The direction of the June Comex gold market on Wednesday is likely to be determined by trader reaction to $1746.90.

Bearish Scenario

A sustained move under $1746.90 will indicate the presence of sellers. If this move creates enough downside momentum then look for a break into the major Fibonacci level at $1711.90. A move under this level could trigger an even further decline with the next support area $1677.30 – $1676.20.

 

Bullish Scenario

A sustained move over $1746.90 will signal the presence of buyers. Taking out the main top at $1756.00 will change the main trend to up. This could create the upside momentum needed to challenge the 50% level at $1767.60. Sellers could come in on the first test of this level, but overtaking it could trigger a further rally into the major 50% level at $1788.50.

 

·         Markets have already shown a willingness to see through the Fed’s cautious rhetoric to speculate that a quickening pace of inflation will demand a pivot in recent weeks, pushing the US Dollar higher alongside yields. A view to a larger fiscal tailwind may revive this dynamic, weighing on gold prices.

Minutes from last month’s FOMC meeting may also help. The conclave concluded with a meaningful uplift of economic projections and a noticeable shift in baseline rate path expectations to a less-dovish setting. If notes on the underlying discussion flag any greater willingness to tighten, bullion may suffer.

 

·         GOLD TECHNICAL ANALYSIS

Gold prices are facing familiar support-turned-resistance in the 1747-66 zone. Pushing above this barrier on a daily closing basis may expose the psychologically significant $1800/oz figure, followed by the 1860-72 congestion area.

 

Immediate support is at 1719.40. Establishing a foothold back below looks likely to open the door for a descent back toward the upper bound of the 1634-80 congestion region. Pushing through that would imply the next leg of the 2021 downtrend is underway.

 

·         Silver fell 0.4% to $25.06 and palladium was down 0.4% at $2,674.30. Platinum rose 0.8% to $1,242.13.

 

Reference: CNBC, Kitco, FXStreet, FXEmpire, DailyFX