Gold fails to capitalize on USD weakness
A softer dollar over the last 24 hours has given some reprieve to gold, which slipped below $1,300 last Thursday as the greenback benefited from weakness across a variety of other currencies.
The euro was quite slow to respond to the PMI data but it seems an improvement in overall risk appetite as the morning has progressed has seen it play catch up. This has put further pressure on the dollar, which was already being weighed on by gains in the pound on the back of Theresa May’s attempts to salvage Brexit with the help of the opposition, a move that could see Parliament form a majority around a softer exit.
This reversal of fortune for the dollar has done little to lift gold, which remains quite flat on the day. Perhaps the improved risk appetite is undoing any good that a softer dollar may otherwise have brought, or maybe recent price action has just made gold bulls a little more apprehensive, with the price having broken back below $1,300, with $1,280 now offering the next major test.
There have been numerous supporting factors for the yellow metal, although with risk appetite returning and the dollar remaining strong it remains challenging for bulls.
