- US Dollar Index continues to recover yesterday’s fall.
- 10-year US T-bond yield turns positive in the last hour.
- Gold inches closer to 2019 lows.
The XAU/USD pair came under a renewed selling pressure in the last hour and broke below the bottom of its daily range of $1290 and extended its losses to the lowest level since March 7 at $1282.
The 10-year US T-bond yield, which posted strong gains on Monday and Wednesday, started the day under a modest pressure to allow gold to find demand as a safe-haven. However, with the yield erasing its daily losses and turning positive on the day above 2.52%, the precious metal lost interest and started to weaken in USD terms. The U.S. President Trump’s latest tweet pointing to further progress in the U.S.-China trade talks seems to be the main reason behind the improved market sentiment.
On the other hand, the data from the U.S. showed that weekly initial jobless claims fell to its lowest level in nearly 50 years at 202K in the week ending March 29 and helped the greenback gather strength. The US Dollar Index extended its daily rebound on the back of upbeat data and was last seen up 0.2% on the day at 97.28. Cleveland Fed President Mester and NY Fed President Williams’ speeches later in the day will be looked upon for fresh impetus.
Technical outlook
With a decisive break below $1280 (Mar. 7 low), the pair could target the lowest level of 2019 at $1276 and meet a renewed bearish pressure with technical sellers coming into play. Below that level, the pair could face the next support at $1266 (Dec. 27, 2018 low). On the upside, resistances are located at $1293 (daily high), $1300 (psychological level) and $1307 (50-DMA).
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