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  • Gold prices consolidate the previous day’s fall from eight-day top.
  • Global markets retrace Thursday’s risk aversion amid a lack of major data/events.
  • Calls of the negative Fed rate regain traders’ attention.
  • Qualitative catalysts to dominate trade sentiment, Fed rate, China and virus are the keywords to follow.

Gold bounce off $1,727.72 to $1,729.70 ahead of the Tokyo open on Friday. Even so, the yellow metal pauses Thursday’s fall from $1,744.75. While consolidation is likely a major factor behind the recent pullback in the bullion prices, calls of the negative Fed rate and vaccine trials from China seem to act as additional catalysts.

S&P 500 Futures part ways from Thursday’s downbeat performance of Wall Street. The Futures of the key US equity benchmark gains 0.35% to 3,020 by the press time after the main index slumped 5.9% the previous day. The reason for the risk barometer’s U-turn, which seems positive for the Antipodeans, could be traced from the news that a potential coronavirus (COVID-19) drug trials in China offer promising results on animals. Furthermore, increasing odds of the negative Fed rate suggest further money flow into the markets and cited the US central bank’s proactive nature to combat the pandemic.

Elsewhere, North Korea keeps alleging the US whereas Trump diplomat Mike Pompeo criticized the Turkish court’s conviction of US Consulate General employee. Additionally, news of the visa restrictions from Japan and Washington also weighs on the risk-tone.

Moving on, a light calendar could keep pushing the traders to closely analyze the news for fresh impetus. In doing so, market players may opt for geopolitical news, as well as headlines concerning the Fed, for near-term direction.

Technical analysis

The bullion’s failure to sustain the breakout of a falling trend line from May 18, currently near $1,730, speaks louder of the safe-haven metal’s weakness. As a result, the sellers might again try to break a 21-day SMA level of $1,723.80 during the fresh declines.


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