Gold drops toward $1,500 as risk-on flows start to dominate
- 10-year United States (US) Treasury bond yield stages a decisive rebound.
- Market sentiment recovers on positive trade headlines on Wednesday.
- US Dollar Index fluctuates around 99 ahead of key events.
After closing the previous day with strong gains, the troy ounce of the precious metal rose to a fresh daily high of $1,511earlier on Wednesday but lost its traction as the improving risk sentiment weighed on the safe-haven assets. As of writing, the XAU/USD pair was down 0.2% on the day at $1,502.50.
The latest headlines surrounding the United States (US) – China trade conflict seems to be allowing risk-on flows to take control of the market action.
Earlier in the day, citing an official with direct knowledge of the matter, Bloomberg reported that China was open to making a partial trade deal with the US despite the fact that the Chinese Foreign Ministry on Tuesday said that they are prepared to retaliate to the United States’ (US) backlisting of the Chinese technology firms.
Moreover, reports of China ramping up agricultural imports from the US are seen as a sign of China’s willingness to ease the tensions ahead of Thursday’s high-level negotiations in Washington. Reflecting the upbeat mood, the 10-year US Treasury bond yield is adding around 1.5% on a daily basis.
The focus will be on FOMC minutes in the American session
Meanwhile, ahead of the Federal Open Market (FOMC) Chairman Jerome Powell’s speech at 15:00 GMT, the US Dollar Index is staying calm near the 99 handles to allow the risk perception to remain as the sole driver of the pair’s action. More importantly, the FOMC will be releasing the minutes of its September meeting later in the US evening.
Technical levels to watch for
|Today last price||1502.3|
|Today Daily Change||-3.30|
|Today Daily Change %||-0.22|
|Today daily open||1505.6|
|Previous Daily High||1509.38|
|Previous Daily Low||1487.8|
|Previous Weekly High||1519.04|
|Previous Weekly Low||1455.5|
|Previous Monthly High||1557.03|
|Previous Monthly Low||1464.61|
|Daily Fibonacci 38.2%||1501.13|
|Daily Fibonacci 61.8%||1496.04|
|Daily Pivot Point S1||1492.48|
|Daily Pivot Point S2||1479.35|
|Daily Pivot Point S3||1470.9|
|Daily Pivot Point R1||1514.05|
|Daily Pivot Point R2||1522.5|
|Daily Pivot Point R3||1535.62|