Having broken below 50-day SMA support in the previous session, Gold traded with slight negative bias for the second straight session on Wednesday and is currently hovering around $1323 region.
The latest leg of slide in the precious metal was accompanied by a drop in the Volatility Index (VIX), which acted as a supportive pillar for risk-on trade and drove investors away from traditional safe-haven assets - like gold. The prevalent risk-on sentiment is reaffirmed by the ongoing up-move in the broader US equity index (S&P 500) and a mild recovery staged by the USD/JPY major.
The global risk appetite got a boost from the first US presidential debate, where Democrat Hillary Clinton came out on top against her Republican opponent, Donald Trump.
However, a tepid recovery in the longer-term (30-years) US Treasury bond yields is pointing to cautious approach ahead of a slew of Federal Reserve speakers, starting with the Fed Chair Janet Yellen's testimony before the Committee on Financial Services.
Traders will remain focus on any news coming out of an informal meeting of major oil producers, which would drive crude oil prices and investors’ sentiment, eventually driving demand for safe-haven assets.
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