- The dollar falls, equity markets too.
- Gold manages to close above $1850 on Tuesday.
- Ahead: US retail sales and industrial production data, plus FOMC minutes.
Gold is rising on Wednesday ahead of major US data, making up some ground lost on Tuesday, when it tumbled from multi-month highs to $1,842. The metal managed to close the day above $1,850 and recently rose to $1,859, the new high of the day.
Technically avoiding a close above $1850 was an important factor for gold, which contained weakness. If it happens, it would point to a bearish extension, with the next relevant support at $1830. To the upside, immediate resistance is at $1860, and then $1870 follows.
Several fronts to pay attention
The Treasury bond yields remain stable, close to the highest levels in months, with the 10-year rate around 2.03%. The dollar, measured by DXY, falls 0.15% and trades at 95.85. Equity markets fell modestly in Europe, as did Wall Street futures, after rising sharply on Tuesday after news of the withdrawal of some Russian troops.
The economic calendar is intense for the next few hours, with the US retail sales report (13:30 GMT) and the industrial production report (14:15 GMT) standing out. In the American afternoon, it will be the turn of the minutes of the last FOMC meeting.
The data and minutes may be key for gold considering the correlation with Treasuries. Current expectations point to the Fed’s rate hike cycle starting in March and could start with hikes of 25 or 50 basis points. For the July meeting, it is discounted that the rate will be at 1% or more. A change in this trajectory has the potential to move the market, including metals.
Technical levels
Source: Fx Street
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