- Gold gains ground for the second day in a row on Thursday amid modest dollar weakness.
- The decline in US bond yields seems to weigh on the dollar and offers support to the commodity.
- Prospects for further Fed policy tightening could limit the rally ahead of Friday’s NFP.
The Prayed builds on the modest rise of the previous day and gains some traction for the second day in a row on Thursday. Steady intraday rally continues through the European session and lifts XAU/USD to a new daily high, around the $1,774-$1,775 zone.
the growing concern about a global economic slowdown, coupled with rising tensions between the US and China caused by US House Speaker Nancy Pelosi’s trip to Taiwan, continue to act as a tailwind for gold. Also, the appearance of some selling around the US dollar offers additional support to dollar-denominated commodities. Despite more aggressive comments from FOMC members, the dollar has struggled to take advantage of this week’s nice rebound from its lowest level since July 5, amid retreating US Treasury yields. .
Having said that, prospects of further Fed policy tightening could curb bulls when opening aggressive positions around gold with no yield. In fact, several Federal Reserve officials hinted this week that More Short-Term Interest Rate Hikes Coming. This, along with the recent recovery in global stock markets, could help limit XAU/USD gains safe haven. Investors may also prefer to stay on the sidelines ahead of the release of monthly US NFP employment data.
The popularly known NFP report will be released on Friday and will play a major role in influencing the price dynamics of the dollar. This, in turn, would act as a new catalyst allowing traders to determine the path of gold in the short term. Meanwhile, on Thursday investors will take a cue from the Bank of England’s monetary policy decision. Later in the American session, the usual US weekly jobless claims data could produce some opportunities around XAU/USD.
gold technical levels
Source: Fx Street
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