Daily Brief, Apr 28: Economic Events Outlook – Gold on a Selling Mode
Arslan Butt • 2 min read
What’s up, traders.
The market continues to trade the risk-on sentiment as most of the investment is going into the US stock markets while investors are withdrawing funds from bullion, which is why the precious metals are on a bearish run. At the same time, the economic calendar is about to offer us some market-moving fundamentals, which include US consumer confidence and Eurozone’s Spanish unemployment rate.
The Conference Board Inc. is due to release consumer confidence data at 14:00 GMT today. Consumer confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity.
It’s a survey of about 5,000 households, which asks respondents to rate the relative level of current and future economic conditions, including labor availability, business conditions, and overall financial situation.
Economists are expecting a drop in the US Consumer Confidence figures from 120.0 to 90.1. Typically a weaker number drives sharp sell-off in the US Dollar. Ahead of the news release, we may see investors shorting the greenback, but later, reversals can be seen in the currency.
Gold – XAU/USD – Daily Outlook
During the Asian session, the precious metal GOLD was trading at 1,702 area. Technically, gold entered the overbought zone and showed a slight bearish retracement below 1,718 region, which marks 23.8% Fibonacci retracement level and can be seen on the chart below.
As per the recent report from the Centers for Disease Control and Prevention (CDC), the number of COVID-19 virus cases surged to 52,459 against the previous day’s 50,439, while the cases surged to 928,619 against 895,766. Despite this, the demand for safe haven gold is getting hit as investors seem to do profit takings ahead of exhibiting a further bullish bias.
The positive mood around the equity market failed to impressed buyers, which normally weakens the Japanese yen’s safe-haven demand. The reason behind the risk-on market sentiment could be the hopes for the restart of the economy. The certainty about the drug trials for the treatments of the deadly disease keeps the market calm.
Gold – XAU/USD – Daily Technical Levels
Pivot Point 1739.2
Gold prices take a bearish turn below the triple top resistance level of 1,735 to complete 50% Fibonacci retracement at 1,698 level. Continuation of selling below this level can open further room for selling until the next support area of 1,689, which marks 61.8% Fibonacci retracement level while resistance holds at 1,708 for now. Good luck!