- Gold falls on Thursday after having one of the best days in months on Wednesday.
- XAU/USD reached a five-day high at $1,662 and recently pulled back as low as $1,641.
- General rebound of the market loses momentum, while the dollar recovers.
The Prayed is falling on Thursday after having made a strong rise from its low in years on Wednesday, when it climbed $30 and reached $1661. In European hours the XAU/USD fell to $1641 where it bounced from and is trying to recapture the $1650 zone.
The $1,660 zone is technically relevant and a close above it could enable a test of the 20-day moving average that is happening at $1,681. In the opposite direction, a return below $1638 in the short term would add bearish pressure. The next supports are at $1620 and the recent low at $1614.
The loss of gold’s recovery comes as bond yields rise after Thursday’s dramatic drop. The 10-year US Treasury bond is at 3.83% (on Wednesday it was above 4% and then at 3.70%). Wall Street futures are in the negative. The broader market is correcting Wednesday’s moves, which is also putting downward pressure on gold, strengthening the dollar.
Much of the attention remains on the global sovereign bond market. In addition, important economic data will be published in the next few hours, starting with the preliminary reading of September inflation from Germany, then it will be the turn of US figures with the second estimate of GDP for the second quarter and the weekly report of orders for unemployment benefit. In addition, several officials from the Federal Reserve including James Bullard, Loretta Mester and Mary Daly.
Technical levels
Source: Fx Street
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