Gold consolidates rebound from weekly lows, holds near daily highs
- XAU/USD peaked at $1558/oz during the American session amid lower US yields.
- DXY heads for daily loss, but off lows.
Gold prices rose on Wednesday, recovering after falling on Tuesday to $1535, the lowest since January 3. During the American session XAU/USD peaked at $1557 and it is about to end the day around $1555, gaining almost ten dollars.
From Tuesday’s low the ounce rose 1.30% and it appears to be heading for a test of the resistance area of $1560. A break above could target $1575. XAU/USD avoided a close below $1545 that is an important support and then it rebounded. If it drops bask under $1545, the bearish pressure will likely rise, exposing $1535.
From a fundamental perspective, the move higher on Wednesday was driven by a decline of the US dollar affected by lower yields. The DXY hit the lowest in a week at 97.16 before bouncing to 97.25.
Gold prices rose despite the signing of the trade deal between the US and China. “The deal includes some reduction in tariffs on Chinese imports but most tariffs will remain in place until the next phase of the deal is agreed. It also includes China agreeing to buy $40 billion worth of US agricultural goods which is a large step up from the $24 billion supplied in 2017”, explained ANZ analysts.
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