Gold prices declined on Friday as global bond yields started showing strength again. Gold is currently trading near $1,700, sharply lower from the recent high at $1,738 which was registered on Thursday.
The Benchmark United States 10-year Bond Yield was trading above 1.598 on early session on Friday and sharply higher from the previous day’s closing. A similar trend was witnessed in Germany, France, Japan, Italy and Australia 10-year bond yields.
The Dollar index found strength from rising global bond yields and pushing other assets class lower. However gold prices found support from President Joseph Biden on Thursday as he signed the $1.9 trillion stimulus bill into law and said he was working to speed COVID-19 vaccinations and move the country closer to normality by July 4.
On the US economic data front, on Thursday's weekly initial unemployment claims fell -42,000 to a 4-month low of 712,000, against expectations for a decline to 725,000. Also, January
JOLTS job openings rose +165,000 to an 11-month high of 6.917 million, stronger than expectations of 6.700 million.
Bullion prices also found support ECB Governing Council comments. ECB expects Pandemic Emergency Purchase Program (PEPP) purchases to ramp up at a "significantly higher" pace over the next quarter than during Q1.
The ECB opted on Thursday to leave its Pandemic Emergency Purchase Program, or PEPP, unchanged, at a total of 1.85 trillion euros ($2.21 trillion) due to last until March 2022.
Gold prices to get fresh direction from the Fed meeting next week. Fed is factoring in $1.9 trillion worth of stimulus and its implications. However, a comment on rising global bond yields would be interesting to watch out for.
Gold prices are likely to face stiff resistance near 10 days EMA at $1,720 and 20 days EMA at $1,744 while it may find a strong support base around $1,691-$1,668