- XAU/USD up 0.16% to $1,711
- Governments to ease COVID-19 lockdowns
- US Dollar Index drops 0.3%
Gold prices XAU/USD are on the rise as the US dollar continues to show weakness amid concerns of risk in equities.
Gold prices move higher on weaker US dollar
Bullion is up 0.16% on the day and it is trading currently at $1,711 after testing $1,713. After a three day losing streak from Friday it seems the yellow metal has rediscovered its mojo. The gain in gold price is a result of weakening the dollar with the US dollar index declining 0.3%. The weakness of the dollar could be attributed to enhanced risk sentiment in financial markets as evidenced by the 1% jump in S&P 500 linked futures.
It is expected that the Fed meeting on Wednesday could heighten the appetite for gold if it shows a desire to introduce additional unconventional tools to cushion the economy in the coming days. Bullion is carving new lows and lower highs ahead of FOMC’s interest rate verdict as the coronavirus lockdown seems to ease.
However gold prices could face a huge pullback in May as the various government moves to ease lockdown measures. The US is planning to open the economy in three phases with various states already ahead with plans to safely reopen.
Gold is an important hedge against the debasement of the currency and thus the current conditions are favorable for bullion to continue thriving. The growing inflation concerns, increasing debt levels, currency debasement as well as monetary policies are all plating a role in the surge in gold prices.
For the remainder of the month, gold prices will try to consolidate at current levels after failing to hit November 2012 highs of $1754. With a lack of momentum for bullion to hold above $1710 levels, there is a possibility of forming support below $1700.81 with the next target being $1696.24.
Time : 29-04-2020
Pivot : $1705.37
Technical View : Short below $1700.81
Target : $1696.24
Comments : Bearish sentiment as the lifting of lockdowns could lead to a pullback
Last Price : $1711.42