Gold (XAU/USD) is declining for the second day in a row. The reason of such a dynamic is that investors have turned to stocks.
Gold jumps after dovish ECB stance, but rebounds later
Overnight gold surged to three-week peaks highs in Asia before flattening out in Friday’s morning trade.
The catalyst for the surge turned to be a unanimous verdict by the ECB not to alter their guidance on its monetary policy or talk about probable updates of an everlasting stimulus program for the time being. Apparently, the given dovish stance was in line with the tone taken by the Fed.
On Friday, August delivery gold futures lost 0.07% in New York trading at $1,244.57. Overnight the commodity rallied to $1,247.48, which is the highest value for three weeks.
The dip in the greenback was softened by the testimony of Fed Chair Janet Yellen. She told that any monetary tightening in America would take place slowly. The greenback was also underpinned by reports from China telling that the country’s surge is moderately ahead of target for 2017.
The previous week, gold grew to two-week peaks because political uncertainty in America, which has extended to this week, made the commodity more attractive as a safe haven versus the dipping greenback.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.