OctaFX | OctaFX Forex Broker
Open trading account
Back

Gold surges to 5-month highs above $1260

  • Risk-aversion boosts the demand for gold on Thursday.
  • Wall Street starts the day modestly lower.
  • US Dollar Index slumps to mid-96s.

With the greenback coming under heavy selling pressure following the FOMC's hawkish policy stance yesterday, the precious metal gathered strength and lifted the XAU/USD pair to its highest level since early July at $1261.60. As of writing, the pair was up more than $18, or 1.5%, on the day at $1261.50.

Although the Fed said that the number of expected rate hikes in 2019 was reduced down to 2 from 3 in the previous forecast, the market reaction weighed on the T-bond yields and revived concerns over the yield curve inversion. Pressured by this development, the US Dollar Index fell sharply and touched its lowest level in a month at 96.20. As of writing, the index was down 0.4% on the day at 96.55.

Additionally, major equity indexes struggle to rebound following yesterday's slide to reflect a negative market sentiment, which helps gold find demand as a safe-haven. At the moment, the Dow Jones Industrial Average is down 0.6% on the day while the S&P 500 is erasing 0.35%.

Today's data from the U.S. showed that the manufacturing sector lost momentum in the Philly area in December and weekly jobless claims increased to 214K for the week ending December 14.

Technical levels to consider

The pair could face the first technical resistance at $1265 (Jul. 9 high) ahead of $1272 (Jun. 25 high) and $1277 (Jun. 20 high). On the downside, supports are located at $1242 (daily low), $1237 (200-DMA) and $1229 (50-DMA).

United States EIA Natural Gas Storage change declined to -141B in December 21 from previous -77B

United States EIA Natural Gas Storage change declined to -141B in December 21 from previous -77B
Read more Previous

US: CB Leading Economic Index increases 0.2% in November following October's 0.3% decline

"The Conference Board Leading Economic Index (LEI)for theU.S. increased 0.2 percent in November to 111.8 (2016 = 100), following a 0.3 percent decline
Read more Next
Start livechat