10 May 2017, 17:59  Gold seems to gain

Gold seems to gain some traction and is now making its way towards session tops near $1225 region. A mildly softer tone surrounding the US Dollar was seen lending some support to dollar-denominated commodities and helped the precious metal to pull away from its lowest level since mid-March, touched in the previous session. Meanwhile, a fresh wave of global risk aversion trade in reaction to the US President Donald Trump’s move to fire FBI Director James Comey, further reinforced by a sharp slide in the US treasury bond yields and negative opening for the US equity indices, boosted demand for traditional safe-haven assets and collaborated to the yellow metal's modest up-tick on Wednesday. However, growing expectations for a Fed rate-hike action in June, with CME group's FedWatch Tool pointing to nearly 90% chances of such an action, seems to be capping further up-move as higher rates in the US make the non-yielding metal less appealing. Investors on Wednesday would get more insight on the central bank's near-term monetary policy outlook from Boston Fed President Eric Rosengren's speech, due later during the NY session. On a sustained recovery beyond $1225 level, a fresh bout of short-covering could lift the commodity towards $1229-30 intermediate resistance moving beyond $1236 level towards testing next major hurdle near $1240-42 region. On the flip side, weakness back below $1220 might continue to find support at 2-month low near $1215-14 area (yesterday's low), which if broken would turn the commodity vulnerable to extend the ongoing slide towards $1210 intermediate support en-route $1205 strong horizontal support.

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