Where Did You Gold? - XAU/USD tracks S&P 500 Futures to print mild losses below $1,750
- Gold fades bounce off intraday low amid quiet session.
- S&P 500 Futures drop 0.50%, DXY struggles to keep the gap-up opening.
- US-China trade fears, virus woes on Europe and Australia weigh on sentiment.
- Geopolitical catalysts from the Middle East, Asia add to the risk-off mood.
Despite failing to extend Friday’s run-up, gold’s latest bounce-off intraday low helps the yellow metal to trim the day’s losses while taking rounds to $1,732-31 during Monday’s Asian session. In doing so, the yellow metal follows S&P 500 Futures and the US dollar index (DXY) moves, amid likely month-end positioning.
Risks dwindle but not gold…
Market sentiment has been sluggish since the start as weekend headlines weigh on the mood. Among them, US Trade Representative (USTR) Katherine Tai’s comments rejecting China’s hopes of tariff waivers and warning of French doctors, concerning the spike in the covid patients in the Intensive Care Unit (ICU) played a major role.
Also on the same side was German Chancellor Angela Merkel’s push for Federal law if needed to direct people to follow the government’s covid restrictions. Further, Australia’s Brisbane, the third-largest city by population, announced a three-day lockdown after finding new local transmission the last week.
Additionally, talks over a colossal explosion in Indonesia and the Suez Canal blockage joins alleged weapon building by North Korea and Iran to heavy the sentiment.
It should be noted that the hopes of US stimulus and no major challenges to the monetary/fiscal policies at Europe and Japan, as conveyed by either their latest policy statements or the policymakers themselves, help the bulls to stay optimistic.
Against this backdrop, S&P 500 Futures decline 0.50% while the US 10-year Treasury yield stays firm around 1.66% by the press time.
Amid a lack of major data/events, gold prices should take clues from the risk catalysts and the US dollar moves.
Unless declining back below 21-day SMA and a falling trend line from January 06, respectively around $1,725 and $1,718, gold prices are likely to keep the recovery mode on the table.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.