· Spot gold rose 0.5% to $1,815.56 per ounce by 0129 GMT, having earlier hit a peak since July 20 at $1,817.35.
· U.S. gold futures climbed 0.9% to $1,815.30 per ounce.
· While the U.S. central bank acknowledged discussing the eventual withdrawal of pandemic-era monetary policy support in its statement, Chairman Jerome Powell said the U.S. job market still had “some ground to cover” before it would be time to pull back.
· Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
· Powell also downplayed the risk of the spread of the delta variant of the coronavirus on the economic recovery.
· Fed’s policy statement weighed on the dollar index, which hit a two-week low on Wednesday, making gold cheaper for holders of other currencies.
· The Centers for Disease Control and Prevention (CDC) said on Wednesday that 66.6% of U.S. counties had transmission rates of Covid-19 high enough to warrant indoor masking and should immediately resume the policy.
· Gold Price Forecast: XAU/USD remains on track to test 200-DMA, US GDP awaited
- Gold price extends three-day uptrend on Thursday, eyes more gains.
- Dovish Fed-led weaker yields, DXY help gold price extend beyond $1800.
- Gold price looks to test 200-DMA ahead of the critical US Q2 GDP.
In the aftermath of the Fed decision, gold price is extending its recent run higher, looking to recapture the critical 200-Daily Moving Average (DMA) at $1821. The market mood has improved amid a rebound in the Chinese stocks, as the People’s Bank of China (PBOC) came to the rescue and calmed the nerves after the recent crash. The recovery in the risk sentiment exerts additional downside pressure on the US dollar, which bears the brunt of the Fed’s dovishness. The weakness in the US rates combined with looming covid concerns also keeps the gold bulls afloat.
Looking forward, the main risk to the gold price rally could come from the US advance Q2 GDP report. The US economy is expected to expand 8.6% in Q2 vs. a 6.4% growth recorded in the previous quarter. Upbeat growth numbers could lift the pressure off the greenback, offering a headwind to gold’s bullish potential.
Meanwhile, the 21-DMA at $1805 guards the immediate downside, below which the 100-DMA at $1800 could be back in play.
Further south, the range lows of $1792 could offer some support to gold bulls.
However, with the 14-day Relative Strength Index (RSI) holding firmer above the midline, the path of least resistance appears to the upside in the near term.
· The Federal Reserve has talked down the risks of a rate hike and tapering a little bit, and that gives gold prospects to drift higher in the short term, said Kyle Rhoda, an analyst at IG Market.
“The next key level of resistance will be in the range of $1,830-$1,840.”
Powell said the U.S. job market still had “some ground to cover” before it would be time to pull back support and that it was “ways away” from considering interest rate hikes.
· Silver rose 0.9% to $25.15 per ounce.
· Palladium rose 0.6% to $2,641.69 per ounce, while platinum gained 0.8% at $1,073.42.
· J&J says U.S. FDA agrees to extend shelf life of its COVID-19 vaccine
The U.S. Food & Drug Administration extended the shelf life for Johnson & Johnson's (JNJ.N) single-shot COVID-19 vaccine to six months from four-and-a-half months, the company said late Wednesday.
· Biden to ask federal workers to get vaccinated or face testing -source
U.S. President Joe Biden is expected to announce on Thursday that all civilian federal workers will need to be vaccinated against the coronavirus or face regular testing, social distancing, mask requirements and travel limits, a source familiar with the matter said.
· U.S. top diplomat meets with WHO chief, backs study into COVID-19 origins
· Australia's Sydney posts record daily rise in COVID-19 cases, seeks military help
· China's assets remain attractive despite recent correction - state media
China’s state media on Thursday said yuan-denominated assets remain attractive and that short-term market panic does not represent long-term value, the latest official effort to shore up investor confidence.
Reference: CNBC, Reuters, FXStreet
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