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Dollar Weakness To Support Gold

Published 04/22/2021, 05:44 AM
Updated 07/09/2023, 06:32 AM

Gold rallied above $1,790 due to the resurgence of Covid-19 infections throughout the world, which has raised the prospects of new lockdowns. The world economy is likely to suffer from it. And global central banks may continue to support the economy by keeping interest rate lower for longer-term. 

The dollar index is trading near 91.095 which is sharply lower from the recent high of 93.470 registered on Mar. 31. Also, weakness has continued in United States 10-year Bond Yield which is positive for precious metals prices. Yield is now trading at 1.5574 and sharply lower from the recent high of 1.7760 registered on Mar. 30.

Gold has underlying support from the Covid pandemic, which is dovish for central bank policies. 

On the economic data front, the UK February house price index rose +8.6% y/y, stronger than expectations of +8.0% y/y and the biggest increase in 6-1/4 years. UK March CPI rose +0.3% m/m and +0.7% y/y, weaker than expectations of +0.4% m/m and +0.8% y/y.

Gold prices are likely to trade firm while above the key support level of 50 days EMA of $1,762. It may find stiff resistance near $1,804 and $1,814.
 
 

Latest comments

DXY has nothing to do with gold. it doesn't even account for important currencies like the Yuan. the only effect it has on gold is the phycological effect it has on traders, which is usually short lived.
so is gold just making a correction?
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