Gold eases from two-week tops, still well bid above $1960 level
|- Gold gained some follow-through traction for the second straight session on Tuesday.
- The uptick was well supported by the heavily offered tone surrounding the greenback.
- The prevalent risk-on environment might cap gains ahead of the FOMC on Wednesday.
Gold climbed to two-week tops, around the $1969 region during the early European session, albeit lacked any strong follow-through and quickly retreated around $8-10 thereafter.
The precious metal built on the previous day's positive move and gained some follow-through traction for the second consecutive session on Tuesday. The heavily offered tone surrounding the US dollar was seen as a key factor that benefitted the dollar-denominated commodity.
However, the prevalent risk-on environment undermined the metal's safe-haven demand. The latest optimism over a potential COVID-19 vaccine remained supportive of the upbeat market mood, which got an additional boost from Tuesday's better-than-expected Chinese macro data.
Apart from this, a modest pickup in the US Treasury bond yields further collaborated towards capping any strong gains for the non-yielding yellow metal. Investors also seemed reluctant to place aggressive bets ahead of the FOMC monetary policy decision on Wednesday.
This makes it prudent to wait for some strong follow-through buying beyond the $1670-72 supply zone before traders start positioning for a further near-term appreciating move.
In the meantime, market participants will look forward to the US economic releases – the Empire State Manufacturing Index and Industrial Production – for some impetus. Heading into Wednesday's key event risk, the data is unlikely to be a major game-changer for the commodity.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.