Gold Prices Under Pressure, as U.S Dollar Picks UpThe precious metal failed to shine at most part of Asia’s trading session on Thursday, as the greenback suppressed the yellow metal’s price from its two-week high. Impressive macros coming from the world’s largest economy revealed the reduced unemployment figures triggering the bullish run in the U.S dollar.
Gold bears kept the precious metal below the $1,950/ounce at London trading session at around 9.55 am GMT.
Gold traders were a bit disappointed with the recent U.S Federal Reserve policy statement as nothing came refreshing for metal traders, other than the usual narrative that it remained committed to keeping rates lower for longer periods in order to trigger inflation. With no quantitative easing offer on the table, metal traders barely moved as its now back to the waiting game for inflation break-evens to nudge higher.
Gold bears got the needed gas to keep the upside move of gold prices at bay on the macro that the U.S dollar index rallied higher even though the U.S Fed Chairman kept his commitments on keeping interest rates at very low levels until inflation rises to about 2%.
Traders are also aware that the precious metal pullbacks anytime it touches the $1,955 price levels in the past few days. The slide is attributed to the gradual recoveries in major financial markets like China and the U.S, as recent economic data showed the major economic juggernauts are firing up from all cylinders.
However, in the long term, the bulls have a strong case as COVID-19 caseloads fast approaches 30 million globally, coupled with a fragile economic outlook particularly in emerging markets, the bulls might falter on the recent development of COVID-19 vaccines, has its believed in some quarters to be ready before the close of 2020 or at worse 2021, meaning it’s most unlikely for the precious metal to breach its record high above $2,072 recorded in August 2020 again.