Gold Prices have stabilized on Tuesday
Spot gold (XAU/USD) prices regained some poise on Tuesday after Monday’s big risk-off/USD strength fuelled drop, and, in doing so, have reclaimed the $1900 level. At current levels around $1905, XAU/USD trades about 0.4% higher on the day, though is still down nearly 1.5% on the week as the US Dollar Index eyes a breakout to fresh multi-month highs above 102.00. A pullback in the US and global yields as investors piled into bonds amid concerns about lockdowns in China and global growth is helping keep spot gold prices for now supported to the north of the $1900 level. But the main driver of gold in recent sessions has been the US dollar, not yields, and the DXY’s recent upwards push from last week’s sub-100 lows have gone hand in hand with XAU/USD pullback from the upper $1900s.
If the DXY does continue its push towards 2020 highs near 103.00, spot gold is at risk of breaking below key support in the $1890 area in the form of the March and prior April lows. This could open the door to further selling pressure that could see spot prices drop back towards the 200-Day Moving Average currently at $1832. Ahead of next week’s policy meeting, Fed policymakers are in a blackout, so there won’t be any more hawkish Fed rhetoric to drive further gold downside/USD upside. But plenty of US data is scheduled for release this week for gold traders to take note of, including Q1 GDP on Thursday and March Core PCE inflation on Friday. On Tuesday, March Durable Goods Orders data is out at 1330BST, followed by March New Home Sales and April CB Consumer Confidence figures at 1500BST.