Gold Price Analysis: Regains $1,700 as risk-off recalls buyers from three-day low

Gold prices take the bids near $1.700.80, intraday high of $1,702.32, during the pre-Europe session on Tuesday. The safe-haven recently bounced off three-day low, prints 0.16% gains on a day now, while benefiting from the broad risk aversion wave.

While the US-China tussle is likely to have provided the initial support to the precious metal, fears of the coronavirus (COVID-19) resurgence seem to have recently put a bid under the bullion.

Portraying the risks, stocks in Asia register losses whereas the US 10-year Treasury yields also drop below 0.70%, down 3.5 basis points (bps) so far during the day.

It should also be noted that the US dollar gains are likely restricting the metal’s upside as the greenback has a negative correlation with the commodity prices.

In addition to the aforementioned risk catalysts, the USD seems to have gained the bids from the Fed policymaker’s efforts to placate traders amid talks of negative Fed rate.

As a result, the US dollar Index (DXY), a gauge of the greenback versus the major currencies, refreshed the two-week high before stepping back to 100.27, up 0.0.5%, by the press time.

Although qualitative catalysts are likely to keep the risks heavy, US inflation figures for April will also be the key to watch for immediate trade direction.

Technical analysis

Sellers look for entry below 21-day EMA level of $1,693 for fresh entries to target an ascending trend line from April 21, at $1,678, until then the bullion’s odds of refreshing the monthly high beyond $1,723.70 can’t be ruled out.