Gold dips back to low $1,840s. Economists at TD Securities expect the yellow metal to remain under downside pressure.
A significant amount of complacent length in gold.“A liquidity vacuum is dragging all assets lower, leaving gold to circle the drain in defiance of its safe-haven status, despite the fierce rally in Treasuries.”
“With CTA trend followers joining into the liquidation party, substantial selling flow continues to weigh on the yellow metal at a time when liquidity is scarce. Prices are now struggling to hold onto the bull-market-era defining uptrend in the yellow metal under the pressure of this selling flow.”
“For the time being, the trendline has held despite the strong CPI report, as the turbulence in risk assets sparked a bid in Treasuries, but we continue to see a significant amount of complacent length in gold which could weigh on prices, while the breadth of traders short has just started to rise from near-record lows.”
EUR/USD steadies near 1.0400 as US stocks rebound
EUR/USD seems to have steadied near 1.0400 in the early American session on Thursday. With Wall Street’s main indexes rebounding from opening lows, the greenback struggles to continue to gather strength, helping the pair limit its losses for the time being.
GBP/USD fluctuates above 1.2200, stays in negative territory
GBP/USD has managed to recover from the multi-year low it touched below 1.2200 earlier in the day, supported by the modest improvement witnessed in risk mood. The pair, however, stays in negative territory and remains on track to post its lowest daily close since May 2020.
Gold retreats toward $1,840 despite falling US yields
Gold has lost its traction and retreated toward $1,840 in the second half of the day. Although the benchmark 10-year US Treasury bond yield is down 2% on the day, the dollar preserves its strength after mixed PPI data and weighs on XAU/USD.