Gold seeks boost from weaker dollar as geopolitical risks recede

Gold attempts to lift off support at $2320

Gold, after spending a significant amount of time in overbought territory, has cooled and declined towards the $2320 level, where it has oscillated. With a reduced safe haven appeal, the gold market appears to be in search of the next bullish, or even bearish, catalyst.

US data has revealed early signs of vulnerability, which could affect US yields and the dollar if major data points follow suit. But for now, the dollar remains strong, with rate cut bets being pushed further and further out.

At this level, $2320 may offer a launchpad for gold if price action unfolds in a similar way to what developed back in March after printing a new all-time high; and consolidating along $2146.80 (prior all-time high) before the next leg higher.

However, should bears take over from here, $2222 appears as the nearest level of support before the 50-day simple moving average (SMA) emerges around $2200 flat. Today’s GDP miss and the disappointing flash PMIs have opened the door to weaker US data. Something to keep an eye on in the future.

Gold daily chart