- Gold takes a breather after hours of high volatility.
- On Thursday it traded above $1,840, before plummeting.
- $1820 zone offered support again, contained the downside.
The gold is trading around $1825, at the same level where it finally closed on Thursday, after a day of high volatility. In the Asian session, XAU/USD bottomed at $1820, the lowest level since Tuesday, before rebounding.
The rise in gold had come after a fall after the US inflation data, in the midst of a general decline in the dollar and despite the rise in Treasury bond yields. Bonds rallied on Friday, partly due to risk aversion. The gold rally ended sharply with statements by James Bullard, a member of the FOMC who stated that they may raise the interest rate by 100 basis points on July 1. Bullard’s comments sent metals down significantly and stocks down.
The economic calendar for Friday is light, highlighting the preliminary reading of the Consumer Confidence Index of the University of Michigan for February, which is expected to show a rise from 67.2 to 67.5.
Support at $1820
The gold pullback found support again at the $1820 area, which is reinforced by the 20-day moving average. This implies that a break of said level could intensify the downward trend. The next significant support is seen at $1810.
Regaining $1830 would ease gold’s negative tone and the metal could go looking for the next resistance at $1835. A daily close above this latest level would be positive for the upside outlook. Then the next resistance of relevance can be seen in the $1850 area.
Technical levels
Source: Fx Street
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