- Gold erases losses after bouncing from $1690.
- Limited rises in the yellow metal against a strong dollar.
Gold is in positive territory on Wednesday and above $1,700 after bouncing from the $1,690 zone. The dominant trend remains down and the stronger dollar limits the recovery.
Still close to critical long-term support
In the Asian session, $1,700 finally gave way and the XAUUSD fell to $1691, the lowest since last Thursday. It then started to recover ground and recently reached as high as $1707, marking a high for the day.
The yellow metal is trading around $1704with the softer downside pressures, but still close to $1,700 and also the long-term support zone of $1,675, where the 2021 and 2022 lows are. The break of said support could generate an acceleration to the downside.
Gold’s recovery is limited by the strength of the dollar. DXY climbed to decade highs and is up 0.22%, trading at 110.50. Treasury yields eased modestly on Wednesday but remain near their highest in months. Wall Street futures are operating in positive territory, but a cautious climate still prevails, which does not favor the demand for raw materials.
The economic calendar for Wednesday shows the US foreign trade report ahead. The spotlight will be on speeches from various Fed officials, including Thomas Barkin, Loretta Mester and Lael Brainard. On Thursday, the European Central Bank will decide on monetary policy.
Technical levels
Source: Fx Street
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