Gold prices traded modestly higher during Thursday‘s APAC morning session after rebounding 1.32% a day ago. Prices returned to above a psychological level at $1,700 as the DXY US Dollar index retreated from a four-month high. This could be attributed to a smaller-than-expected infrastructure plan announced by President Joe Biden, who aims to revamp America’s infrastructure facilities, create millions of jobs and tackle climate changes with the proposal. Yet the $2.25 trillion spending package came below market expectation of $3-4 trillion, resulting in some unwinding activity.To get more news about WikiFX, you can visit wikifx.com official website.
A weaker US Dollar provided bullion with some temporary relief, but
this may not change its medium-term bearish trajectory as the
longer-term Treasury yields continues to march higher on reflation
optimism. The heavily watched 10-year rate hovered near its 14-month
high of 1.744%, exerting downward pressure on precious metal prices. The
real yield, as represented by the 10-year Treasury inflation-indexed
security, climbed to -0.63% from -0.70% a week ago. A rising real yield
may weigh on gold prices despite a temporary retreat in the Greenback.
Friday‘s US nonfarm payrolls report will be closely watched by traders
for clues about the health of the labor market and its ramification for
the Fed’s interest rate path. Volatility could be exacerbated by thinner
trading volume as many markets are shut for the Good Friday holiday.
Prior to this, ADP private payrolls added 517k new jobs in March, the
most seen since September 2020, but still fell below the consensus
forecast of 550k. If the nonfarm payrolls number fails to meet an
estimation of 647k, this could lead to a deeper pullback in the US
Dollar and buoy bullion prices. The opposite may happen if the actual
number beats.
Crude oil prices were little-changed during Thursday‘s APAC trading session after falling over 3.8% over the prior two sessions. Prices were facing a couple of headwinds, including a larger-than-expected build in API crude inventories, a revision down of this year’s oil demand outlook by OPEC+, and the lingering impact of a third viral wave in Europe. Against this backdrop, market participants are expecting OPEC+ to roll over its current production cut through May to stabilize prices.
The energy demand outlook appears to be tarnished by renewed wave
of lockdowns in Europe and rising Covid-19 infections in India and
Brazil. The Canadian province of Ontario will be put under lockdown
restrictions for 28 days, marking the latest restrictive measure carried
out by a major economy to curb the spread of coronavirus.
Gold prices rebounded from a key support level at US$ 1,676 and
extended slightly higher. The primary trend remains bearish-biased
however, as suggested by the downward-sloped 50- and 100-day SMA lines,
although the 20-day SMA seems to be flattening. Gold prices have also
broken the minor “Ascending Channel” earlier this week, suggesting that
bears are still in control. The MACD indicator is probably going to form
a bearish crossover beneath the neutral midpoint, underpinning downward
momentum.
WTI retreated from the 200% Fibonacci extension level of 66.50 and entered a technical correction. Prices appeared to be hesitant to decide a near-term direction as traders await policy guidance from OPEC+. A daily close below the 50-day SMA (59.67) would likely intensify near-term selling pressure and carve a path for price to test a key support level at 58.29 (the 127.2% Fibonacci extension). The MACD indicator has formed a bearish cross over and trended lower since, underscoring bearish momentum.
By | buzai232 |
Added | Apr 3 '21, 12:58AM |
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