Gold Price Analysis: XAU/USD trades with modest gains, upside seems limited

Update: Gold reversed an intraday dip to sub-$1,810 levels, or one-week lows and climbed to the top end of its daily trading range during the early North American session.

The US dollar struggled to preserve its intraday gains to weekly tops, instead witnessed some selling at higher levels amid a softer tone surrounding the US Treasury bond yields.

On the US economic data front, the Initial Weekly Jobless Claims fell more than anticipated to 473K during the week ended May 7 as against the previous week’s upwardly revised reading of 507K.

A modest pullback in the US Treasury bond yields held the US dollar bulls from placing aggressive bets, which, in turn, extended some support to the dollar-denominated commodity.

Hence, it will be prudent to wait for some strong follow-through buying around gold before traders positioning for the resumption of the recent appreciating move witnessed over the past one-and-half-month or so.

Given the fewer catalysts ahead of the North American session, the pick-up in the US dollar index , stay firm.

Gold drops back to $1,814.75, following the biggest daily losses since March-end, during Thursday’s Asian session.

Following the data, Fed’s Vice Chair Richard Clarida and Atlanta Federal Reserve President Raphael Bostic tried to placate bears but failed.

Not only the reflation fears but the ongoing tussles between Israel and Palestine also weigh on the trading sentiment and gold.

Against this backdrop, Wall Street benchmarks dropped around 2.0 each, marking the third day of losses on Wednesday.

Looking forward, gold traders should wait for more clues that challenge the easy money policies.

Having justified the early-week pullback from 200-day SMA on Wednesday, gold’s latest corrective pullback battles 50% Fibonacci retracement of January-March downside, around $1,820.

Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.

The recent Bitcoin price crash seen on Wednesday is comparable to the one in late April.

The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice.

…Read the full story