Gold prices are trading with minor gains from the previous week on the backdrop of some correction in the dollar index. However, the gold rally is likely to be halted due to strength in global equities which will reduce safe-haven demand for the precious metal.
Gold prices are also likely to trade weak following strength in US 10-year bond yields. Gold is trading near $1,733, slightly higher from a recent low of $1,676.50 registered on Mar. 30. The dollar index is trading near 92.62 which is marginally lower from a recent high of 93.47 registered on Mar. 31. The United States 10-Year Bond Yields is currently trading near 1.711 which is a significantly higher level in recent months; however, prices are still below the recent high of 1.776 registered on March 30.
According to the CFTC Commitments of Traders report for the week ended Mar. 30, net long for Gold futures dropped by 6,539 contracts to 167,528 for the week. Speculative long position increased by 679 contracts, while shorts also gained by 7.218 contracts.
On the economic data front, the US Mar ISM services index rose +8.4 to 63.7, stronger against expectations of 59.0, also US Feb factory orders ex-transportation fell -0.6% m/m, stronger than expectations of -1.1% m/m. Data is supportive of gold prices.
Gold has underlying support from the Covid pandemic. The overall global Covid-19 caseload has topped 131.6 million, while the deaths have surged to more than 2.85 million, according to the Johns Hopkins University. Fresh lockdown norm in India and Eurozone has increased economic uncertainty and positive for safe-haven demand for gold.
Gold prices are currently trading firm and are likely to face stiff resistance near 50 days EMA at $1,757 and 100 days EMA at $1,799. Meanwhile it a find strong support base near $1,714 and $1,691