Gold Price Analysis: Supported above $1700 after $8 drop, US ADP in focus
- Tepid start to Europe keeps the rebound intact in Gold.
- Easing lockdowns and pick-up in global activity weighed.
- 10-DMA is the level to beat for the bulls, US ADP in focus.
Gold prices (XAU/USD) are consolidating in a tight range above $1700, having plunged nearly $8 in Asia after investors cheered the news of the global economies re-opening up from the coronavirus lockdowns. The easing of the lockdown measures would likely revive the business activity and dull the safe-haven appeal of the yellow metal.
The prices have managed to recover from the lows just above the 1700 level, but the further upside looks elusive, as the US dollar continues to hold firmer across its main competitors amid looming global economic uncertainty and US-China tensions.
US President Donald Trump called on China to be transparent about the origin of the virus, as his administration weighs new tariffs on Beijing. The US dollar index rises 0.15% to 99.85, flirting with 99.92 highs.
From a broader perspective, the bullion will continue to derive support from the massive m monetary and fiscal stimulus measures rolled out globally to cushion the economic fallout from the pandemic.
The focus now shifts to Friday’s US Non-Farm Payrolls data for fresh direction on the greenback and in turn on gold prices. In the meantime, markets will take cues from the US ADP jobs data due later today, especially after US ISM Non-Manufacturing PMI contracted for the first time in over a decade last month.
At the press time, gold trades at 1705.30, modestly flat on the day. The price is locked between the 10-DMA at 1710 and 21-DMA at 1701.20. The US ADP data could trigger fresh break on either side, with the move higher more likely amid a lack of healthy resistances.
Gold: Additional technical levels to watch