Gold Sideways, Commodities Down Amid Risk Appetite and Firm Dollar

Market sentiment is positive on the session as China manufacturing data is still lifting optimism. Gold and precious metals are trading under pressure.
Mauricio Carrillo
Gold Sideways, Commodities Down Amid Risk Appetite and Firm Dollar
Gold Sideways, Commodities Down Amid Risk Appetite and Firm Dollar

Precious metals such as Gold, silver, and Palladium are trading under pressure on Tuesday as China’s manufacturing data is still lifting market sentiment and riskier assets.

Tuesday seems to be a consolidation day ahead of more gains in riskier assets. Investors will see US Durable Goods data as a possible catalyst for more reasons to be optimistic.

Also, interest rate differentials between major economics are pushing Greenback up with the Dollar Index trading positive for the sixth day in a row. Gold is trading sideways, silver and palladium are down.

Dollar index tests 97.40 resistance

After rising for six days in a row, the Dollar index is now testing the 97.40 level as the unit jumped to trade at highs since March 8 at 97.47.

DXY is currently trading at 97.40, 0.05% positive on the day. If the pair consolidates levels above the 97.40, it will find next resistance at the critical 97.70 area. Above that, the unit will have a clear way to 98 and 99 levels.

If the pair fails to break above 97.40, it will get back to 97.00 and 96.80, where the 20-day moving average is right now.

Market sentiment sustains dollar

However, market sentiment is pro-dollar right now as FX Empire analyst James Hyerczyk highlighted in a recent article. “Despite the Fed turning dovish, U.S. interest rates are just high enough to be attractive to foreign buyers, making the dollar a more attractive asset.”

Gold is flat on the day ahead of big data on the week

XAUUSD daily chart Gold April 2nd

As the dollar is trading at highs since March 8, gold is pricing at lows of the same day. The yellow metal is trading water on Tuesday as investors are more interested in dollar than gold, but bulls are not ready to give up yet.

At least not before the Nonfarm payrolls data that will be published on Friday. In the short term, investor will take US durable goods orders as immediate and brief opportunity for trading, but all eyes are on NFP.

XAU/USD is trading at 1,288, almost flat on the day as the metal has been moving horizontally between 1,285 and 1,289 for the whole session.

Gold is not sexy right now

ANZ analyst Daniel Hynes believes that gold is falling because the economic uncertainty and fears on a global recession are easing so the safe haven appeal of gold is no longer in play.

“Concerns we saw emerge in the past few weeks around economic growth has certainly eased and that shift (in sentiment) in the past day or two resulted in little bit of selling in gold market,” Hynes said to CNBC.

As China is one of the most important catalysts for global growth, weekend manufacturing data in China is giving everybody reasons to believe we are in the right direction.

“If that’s the case then you have to believe that a failure by the U.S. and China to reach a trade deal may be the only way we’ll see any appreciation in gold prices over the near-term,” FX Empire’s Hyerczyk stated.

Silver fights for the 15.00 critical area

XAGUSD daily chart Silver April 2nd

A significant battle is happing in the Silver Dollar chart with bulls and bears fighting for the 15.00 significant level.

Silver is trading negative for the second day with pair losing 0.30% on the day to trade at 15.05.

XAG/USD is currently testing the 15.00 significant area and the 200-day moving average at 15.05. A break below 15.00 would open the doors to first 14.90, but significant drops to the 14.60 area.

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