- Gold reversed an early dip and turned positive for the second straight session on Thursday.
- Dismal Eurozone PMIs dented the market mood and revived the metal’s safe-haven demand.
- Sustained USD buying seemed to cap any further gains for the dollar-denominated commodity.
Gold edged higher during the early European session and refreshed weekly tops, around the $1720 region in the last hour.
Following an early dip to the $1707 region, the precious metal regained some positive traction and turned higher for the second consecutive session on Thursday. The commodity remained supported by expectations that the world economy will remain weak, even after the lockdowns are eased.
Meanwhile, the market concerns over the economic fallout from the coronavirus pandemic were further fueled by dismal PMI print data from France and Germany. The ugly data largely negated the latest optimism over the passage of another $484 billion economic package by the US Senate.
This was evident from a turnaround in the global risk sentiment and provided a goodish lift to the precious metal’s perceived safe-haven demand. However, sustained US dollar buying might turn out to be the only factor capping any strong gains for the dollar-denominated commodity, at least for now.
The USD might continue to benefit from its status as the global reserve currency amid persistent worries over the economic fallout from the coronavirus pandemic. Hence, it will be prudent to wait for some strong follow-through buying around the commodity before positioning for any further positive move.
Market participants now look forward to the US economic docket – highlighting the release of flash Manufacturing PMI and Initial Weekly Jobless Claims. The data might influence the USD price dynamics, which coupled with the broader market risk sentiment might provide some trading impetus.
Technical levels to watch
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