Commodity Market: Gold eases from one-week highs on COVID-19 vaccine hopes, ECB policy decision, US retail sales eyed

Gold eased from Wednesday’s one-week highs on Thursday, as prospects of a COVID-19 vaccine prompted investors to trim their safe haven bets.

Earlier this week Moderna Inc’s novel coronavirus vaccine showed promising results from its early-stage trials. The vaccine triggered immune responses in all 45 healthy volunteers, the company’s research team told the New England Journal of Medicine.

Russia also reported positive results in early-stage testing on Wednesday. A COVID-19 vaccine, being developed by the First Moscow State Medical University and the Main Military Clinical Burdenko Hospital, was reported to have successfully completed early trials.

Also weighing on Gold were indications by US President Trump that no further sanctions would be imposed on Chinese entities responsible for the enactment of national security legislation for Hong Kong.

As of 9:25 GMT on Thursday Spot Gold was edging down 0.23% to trade at $1,806.14 per troy ounce, while moving within a tight daily range of $1,804.76-$1,813.49. The precious metal has risen 0.51% so far this week, following five consecutive weeks of gains.

Meanwhile, Gold futures for delivery in August were edging down 0.32% on the day to trade at $1,807.95 per troy ounce, while Silver futures for delivery in September were down 0.60% to trade at $19.642 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching up 0.06% on Thursday to 96.09, hovering above Wednesday’s one-month low (95.78).

Today Gold traders will be paying attention to European Central Bank’s monetary policy decision at 11:45 GMT for clues over stimulus.

Another key release today is the monthly report on US retail sales due out at 12:30 GMT. Analysts on average expect a 5.0% monthly growth in sales in June, following a record 17.7% surge in May.

Also at 12:30 GMT, the US Labor Department will report on jobless claims. The number of people in the country, who filed for unemployment assistance for the first time during the business week ended July 10th, probably eased to 1,250,000, according to expectations, from 1,314,000 in the preceding week.

At 15:10 GMT Federal Reserve President for New York John Williams is scheduled to speak during an Office of Financial Research Advisory Committee meeting via webcast, while at 17:30 GMT Fed President for Chicago Charles Evans is expected to participate in a virtual presentation at the Rocky Mountain Economic Summit.

Meanwhile, near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of July 16th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on July 28th-29th, or unchanged compared to July 15th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,809.36
R1 – $1,816.24
R2 – $1,822.12
R3 – $1,829.00
R4 – $1,835.89

S1 – $1,803.48
S2 – $1,796.59
S3 – $1,790.71
S4 – $1,784.83