Gold corrects further from multi-year tops, slides to $1635 area

Gold falls sharply on Tuesday to snap five days of winning streak.
Stability in financial markets weighed heavily on safe-haven assets.
A modest rebound in the US bond yields added to the selling bias.

Haresh Menghani FXStreet

Gold witnessed some follow-through long-unwinding trade on Tuesday and extended the previous session's sharp intraday retracement from seven-year tops.

As investors assessed the economic impact of a surge in confirmed coronavirus cases globally, the precious metal witnessed a dramatic turnaround on Monday and finally settled with only modest gains around the $1659 region.

Given the recent upsurge of over 9% since the beginning of this month, the pullback could be solely attributed to some profit-taking amid extremely overbought conditions on short-term charts and lacked any obvious fundamental catalyst.

The downfall extended through the Asian session on Tuesday and was further fueled by some stability in the financial markets, which tends to undermine demand for traditional safe-haven demand and dragged the commodity to $1633 area.

This coupled with a goodish rebound in the US Treasury bond yields further drove flows away from the non-yielding yellow metal and contributed to the ongoing corrective slide, with bulls shrugging off a subdued US dollar price action.

Market participants now look forward to the US economic docket, highlighting the release of the Conference Board's Consumer Confidence Index, which might influence the USD price dynamics and provide some impetus to the dollar-denominated commodity.

Technical levels to watch

XAU/USD

Overview
Today last price	1643.56
Today Daily Change	-16.12
Today Daily Change %	-0.97
Today daily open	1659.68

Trends
Daily SMA20	1586.17
Daily SMA50	1554.59
Daily SMA100	1516.85
Daily SMA200	1476.29

Levels
Previous Daily High	1689.4
Previous Daily Low	1643.52
Previous Weekly High	1649.32
Previous Weekly Low	1578.88
Previous Monthly High	1611.53
Previous Monthly Low	1517.1
Daily Fibonacci 38.2%	1671.87
Daily Fibonacci 61.8%	1661.05
Daily Pivot Point S1	1639
Daily Pivot Point S2	1618.32
Daily Pivot Point S3	1593.12
Daily Pivot Point R1	1684.88
Daily Pivot Point R2	1710.08
Daily Pivot Point R3	1730.76

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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