Home Gold turns positive post-US GDP, lacks follow-through
FXStreet News

Gold turns positive post-US GDP, lacks follow-through

  • Positive trade-related headlines exerted some intraday pressure on the commodity.
  • The USD bulls seemed unimpressed by mostly in-line US GDP and helped gain traction.
  • Bearish RSI divergence on the daily chart warrants some caution for bullish traders.

Gold quickly reversed a mid-European session dip to the $1534 region and moved back into the positive territory post-US GDP, albeit lacked any strong follow-through.
 
Spot failed to capitalize on the early uptick to the $1550 area and witnessed some pullback in reaction to positive trade-related comments the Chinese Commerce Ministry spokesman, which triggered a fresh wave of global risk-on trade and dented Gold’s perceived safe-haven status.

Unimpressive US GDP print helped regain traction

Improving global risk sentiment was further reinforced by a solid intraday up-move in the US Treasury bond yields, which further collaborated towards driving flows away from the non-yielding Gold and collaborated to the intraday slide, albeit a subdued US Dollar helped limit the downfall.
 
Meanwhile, Thursday’s mostly inline release of the US GDP report, showing that the economy expanded at an annualized pace of 2.0% during the second quarter of 2019, did little to impress the USD bulls and seemed to be the only factor behind Gold’s latest leg of a sudden pick up in the last hour or so.
 
From a technical perspective, bearish RSI divergence on daily charts now seemed to suggest that Gold might have already topped out in the near-term, which might prompt some aggressive long-unwinding trade and thus, warrant some cautions before initiating any aggressive bullish bets.

Technical levels to watch

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.