- Dollar bounce on better economic numbers from the US.
- XAU/USD bears on a favourable technical outlook.
- Gold bounce to remain shallow ahead of the ISM.
Gold-bears have been on a rampage as the broad-based US dollar buying emerged on Wednesday. The XAU/USD lost 1.5 Percent yesterday to close at 1942 dollars.
The short-covering rally in the US dollar developed fresh legs as US Factory Orders beat expectations and signalled an improved economic recovery optimism set by stronger US ISM Manufacturing PMI.
The sell-off in the euro, after the ECB member comments, helped the US dollar to come back from recent record lows. The US equity rally on the back of stimulus hope and economic optimism also pressurized the gold prices.
Today, the yellow metal tried to pull back from the three-day lows but met with a lot of resistance from the top as the dollar held its overnight gain. US Jobless Claims and ISM Services PMI data are now awaited for a new direction in the XAU/USD. Till then, the bears will have a field day selling the bounces as technicals favour the gold bears.