- Corrective rally to $ 1300 loses steam, as sellers return amid upbeat risk sentiment.
- Markets eye last week’s low of 1266 on potential Fed’s hawkish tweak.
Gold (futures on Comex) extended its retreat from two-week tops of 1290.85 and hit fresh three-day lows at 1279.25 levels, mainly driven by persisting risk-on moods amid renewed US-China trade deal hopes, as reflected by higher S&P 500 futures. At the press time, the yellow metal is seen attempting a tepid bounce back near 1282 region.
Meanwhile, the weakness seen around the US dollar and US Treasury yields heading into the key US macro releases and FOMC monetary policy decision, failed to offer any reprieve to the gold bulls. Markets remain wary about the Fed’s language/ tone in its policy statement, against the backdrop of softer inflation, strong labor market and retail sales in the US.
Should the Fed statement read less dovish/ hawkish, gold prices could drop further to test last week’s low reached at 1266 levels. On the other hand, the stalled corrective bounce could again gather steam if the US Fed talks rate cuts, although that looks unlikely, courtesy of sustained labor market strength and record highs in stocks,” FXStreet Analyst, Omkar Godbole notes.
Gold Technical Levels
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