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Gold Intraday: All Eyes on US First Quarter GDP and Fed

Gold lost its upward momentum since there is growing signs of economic restarts in major countries. Ironically, some health experts warned that reopening without meeting criteria could prolong the coronavirus outbreak. Spot gold rebounded to $1,710 in Asian trading hours, compared with a day-low nears $1,692 in the prior day. Meanwhile, investors will turn their focus to the U.S. first quarter GDP and the Federal Reserve monetary policy meeting outcome, both due later in the day.

The magnitude of coronavirus impact on the U.S. economy is hard to predict, though the market is expecting a 4.0% contraction in the first quarter. Bullish gold investors would be hoping to see a sharper decline in growth and a downbeat tone from the Fed.

From a technical point of view, there are potential signs of a rebound in spot gold price as shown on the 1-hour chart. It has broken above a bearish channel drawn from April 24, after forming a double-bottom near $1,692, which is also a 38.2% Fibonacci retracement of the rally began on April 21. Bullish investors might consider $1,700 as the nearest intraday support, with potential rebound targets at $1,721 and $1,730. In an alternative scenario, a break below $1,700 would be a warning that $1,692 may be threatened again.

Source: TradingView, GAIN Capital

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