- Resurgent USD demand exerted some pressure on gold during the Asian session on Friday.
- The early downtick attracted some dip-buying near $1720 amid the prevailing cautious mood.
- Some follow-through strength should pave the way for a move back towards multi-year tops,
Gold managed to reverse an early dip to the $1721 area and has now moved back closer to the top end of its daily trading range.
The precious metal edged lower during the Asian session on Friday and pulled away from one-week tops set in the previous session. A strong pickup in the US dollar demand was seen as a key factor exerting some pressure on the dollar-denominated commodity.
Thursday’s terrible economic releases from the Eurozone, UK and the US further illustrated the extent of economic damage caused by the coronavirus pandemic. This continued extending some support to the greenback’s status as the global reserve currency.
Meanwhile, the early downtick lacked any strong follow-through selling, instead attracted some dip-buying amid the pessimism over reports that Gilead Sciences’ antiviral drug remdesivier failed to help severely ill COVID-19 patients in its first clinical trial.
The latest development weighed on investors’ sentiment and the same was evident from a cautious mood around the equity markets. This led to a fresh leg down in the US Treasury bond yields, which further helped limit the downside for the non-yielding yellow metal.
Currently hovering around the $1730 region, traders are likely to wait for some follow-through buying before placing fresh bullish bets. The commodity might then aim back towards challenging multi-year tops, around the $1748 region set on April 14.
Later during the early North-American session, the release of the US Durable Goods Orders for March might influence the USD price dynamics and produce some short-term trading opportunities on the last day of the week.
Technical levels to watch
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