Gold Price Analysis: Bulls retreat above $1,700 as DXY gains fresh bid on trade optimism
- Gold struggles around the monthly top, drops off-late.
- US-China tensions ease following the latest trade headlines.
- DXY bounces off three-day low amid fresh optimism ahead of US NFP.
Gold prices drop to $1,715.60, down 0.05% on a day, following the fresh on risks, also the US Dollar Index (DXY), during early Friday.
In addition to updates from China’s Xinhua that US, China agreed to remain in communication and cooperation, updates from the S Trade Representative (USTR) Office also escalated the previous risk-on sentiment. The USTR came out with an official statement, citing that the Chinese Vice Premier Liu He, US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer discussed economic and trade issues, including phase one deal.
Thursday’s story from Bloomberg suggested the US-China trade negotiators are well-positioned to renew trade talks after an almost four-month break during the early next week.
While portraying the risks, US 10-year Treasury Yields snap the previous day’s fall with one basis point (bp) of increase to 0.64% whereas sticks in Asian also register gains by the press time.
Looking at the DXY, a gauge of US dollar strength versus major currencies, Thursday’s downbeat data dragged it from the two-week top and the weakness prevailed during early Asia on Friday. That said, the greenback indicator recently bounced off intraday low of 99.63 to currently around 99.70 but remains down 0.13% on a day.
Despite the latest risk-on sentiment, traders are heading towards the pre-NFP lull before the US April month employment data release.
Read: Nonfarm Payrolls Preview: Outrageous employment collapse priced in?
Technical analysis
The bullion’s failure to cross nine-day-old horizontal resistance, around $1,722/23, keeps sellers directed towards $1,7000 whereas a two-week-long support line, at $1,675, could check bears afterward. Alternatively, an upside clearance of $1,722/23 horizontal resistance isn’t a sure sign for the safe-haven’s run-up as a falling trend line from April 14, currently at $1,728, can check the buyers afterward.
Reprinted from FXStreet,the copyright all reserved by the original author.
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