Gold bulls cheer USD weakness
The greenback has eased across the board yesterday and remains under a heavy pressure on Thursday. Against this backdrop, gold prices managed to bounce from three-week lows and trim weekly losses. As such, the precious metal is back above the $1,215 handle and is targeting the $1,230 level again.
Earlier this week, the bullion retreated heavily amid some signs of recovery in risk appetite coupled with strong dollar demand. The current corrective rebound brightens the short-term prospects of the yellow metal but the wider picture shows that the downside risks still persist.
First, the sentiment in the global financial markets remains unstable and riskier assets are vulnerable to further losses due to a number of risk factors and events, including trade wars and political uncertainty globally. Second, the greenback may yet regain its strength before the end of this week should the US NFP employment data point to a healthy rise in jobs and wages.
Therefore, it is possible that after the current correction, gold prices will resume the decline, though the potential pressure will likely be limited at this stage.
Earlier this week, the bullion retreated heavily amid some signs of recovery in risk appetite coupled with strong dollar demand. The current corrective rebound brightens the short-term prospects of the yellow metal but the wider picture shows that the downside risks still persist.
First, the sentiment in the global financial markets remains unstable and riskier assets are vulnerable to further losses due to a number of risk factors and events, including trade wars and political uncertainty globally. Second, the greenback may yet regain its strength before the end of this week should the US NFP employment data point to a healthy rise in jobs and wages.
Therefore, it is possible that after the current correction, gold prices will resume the decline, though the potential pressure will likely be limited at this stage.
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