Strength in bond yields and the Dollar Index is keeping gold prices under pressure.
Dollar index prices rallied above the four-month high and bond yields continued a recovery rally.
The 10-year T-note yield on Thursday rose +1.3 bp to 1.623%, which is moderately below last Thursday's 13-month high of 1.753% and currently trading near 1.658%,
The dollar index is trading near 92.733 which is sharply higher from recent lows of 89.165. Gold prices are consolidating near $1727, where the upside is capped due to strength in the dollar index and bond yields.
On the economic data front, US Q4 GDP was revised upward to 4.3% (q/q annualized) from 4.1%, against expectations of no change at 4.1%. Also, weekly initial unemployment claims fell -97,000 to a 1-year low of 684,000, against expectations of 730,000. Both data were supportive of the US dollar and negative for gold prices.
Meanwhile, UK retail sales recovered slightly in February as consumers settled into the second month of a lockdown. British retail sales rose by 2.1% in February from January. However, US PCE prices and Core PCE price index data US is likely to provide further direction to gold prices which is scheduled to be released later today.
Gold prices found support from Fed comments. Fed Chair Powell said the Fed would wait until the economy has "all but fully recovered" before pulling back its emergency stimulus measures. Also, Fed Vice Chair Clarida said, “it will take some time for economic activity and employment to return to levels that prevailed at the business cycle peak reached last February.”
The third wave of coronavirus in the Eurozone is providing safe-haven support to gold prices as it is negative for economic growth and indicating that dovish policies will stay for a longer period. The overall number of global Covid-19 cases has surpassed 125.53 million, while the deaths have surged to more than 2.76 million, according to the Johns Hopkins University.
Gold prices are likely to face stiff resistance near 20 days EMA at $1737 and 50 days EMA at $1770 while it may find support level around $1705 and $1690.