Gold eases from multi-year tops, still well bid near $1380 level
- Fed opened doors for a rate cut later this year and triggers some aggressive buying.
- Tumbling US bond yields/prevalent USD bearish pressure remained supportive.
- Bullish equities seemed to be the only factor capping gains amid overbought conditions.
Gold built on the post-FOMC upsurge and rallied to near six-year tops during the Asian session on Thursday, albeit retreated a bit thereafter.
The Fed on Wednesday left key interest rates unchanged but kept the door open for an interest rate cut by the end of this year. The US 10-year Treasury bond yield dropped below the 2.0% mark in reaction to dovish FOMC commentary and benefitted the non-yielding yellow metal.
Meanwhile, the latest leg of a free fall in the US Treasury bond yields triggered some aggressive US Dollar selling pressure and provided an additional boost to the dollar-denominated commodity and collaborated to the ongoing strong positive momentum to the highest level since September 2013.
Adding to this, possibilities of some aggressive stops being triggered on a sustained move beyond last week's swing high, around the $1358 region, further aggravated the move during the Asian session on Thursday and lifted the commodity closer to the key $1400 psychological mark.
However, the prevailing risk-on mood, as depicted by bullish trading sentiment across European bourses and indications of a strong opening in the US equity markets, weighed on the precious metal's relative safe-haven status and seemed to be the only factor capping gains.
It would now be interesting to see if the commodity is able to attract some fresh dip-buying interest or traders opt to take some profits off the table amid near-term overbought conditions and renewed optimism over a possible resolution to the prolonged US-China trade disputes.
Technical levels to watch
This article is published only for general use basic informatory purposes and should not be considered or depended on as a financial or investment advice. Investors should make sure that they understand the risks and seek independent financial advice at all times. CFDS ARE COMPLEX INSTRUMENTS AND COME WITH A HIGH RISK OF LOSING MONEY RAPIDLY DUE TO LEVERAGE.