Gold: Below $1,700 as sellers return to desks after Monday’s absence

• Gold fails to extend the previous day’s gains, remains depressed below $1,700.
• Another aid package from the US on the way, President Trump pushes for economic restoration.
• Oil stabilizes after the previous day’s slump, US bonds, Asian equities remain weak.
• Virus updates, actions from oil majors, US policymakers will be in focus.

Despite beginning the week on the positive side, Gold prices drop to $1,689, down 0.36% on a day, amid the initial hour of the Tokyo open on Tuesday. While the broad risk aversion wave keeps the buyers hopeful, the US dollar strength seems to cap the bullion’s near-term upside.

The House Speaker Nancy Pelosi recently confirmed the previous hopes of US President Donald Trump that the Senate will vote on another round of aid packages, likely around $120 billion, for the small businesses.

As a result, the US stock futures part ways from Wall Street’s losses and register mild gains at the time of writing.

Also contributing the relief could be the pause in the oil’s slump. The black gold dropped into the negative territory (for May contract), the previous day amid calls of no storage space backed up higher supplies and the lack of demand due to the coronavirus (COVID-19) outbreak.

Even so, the US 10-year Treasury yields extend the previous day’s declines to 0.618% whereas Japan’s NIKKEI drops more than 1.0% to 19,450 by the press time.

It should also be noted that the US Dollar Index (DXY), an indication of the greenback’s performance compared to the basket of major currencies, register 0.05% profits to 100.15 as we write.

Moving on, updates concerning the US stimulus package as well as oil’s performance can be considered as immediate catalysts while the virus news will remain on the driver’s seat.

Technical analysis

Only sustained trading beyond $1,700 could recall buyers targeting the latest high surrounding $1,748. Apart from that, sellers can aim for a 21-day SMA level of $1,650.