- Gold witnessed some selling on Tuesday and eroded a part of the overnight gains to two-week tops.
- Resurgent USD demand, a modest pickup in the US bond yields exerted some pressure on the metal.
Gold maintained its offered tone through the first half of the European session and was last seen hovering near the lower end of its daily trading range, just above the $1,780 level.
The precious metal continued with its struggle to reclaim the $1,800 mark and witnessed some fresh selling on Tuesday, eroding a part of the previous day's strong positive move to over one-week tops. The pullback was sponsored by resurgent US dollar demand, which tends to dent demand for the dollar-denominated commodity.
As investors looked past Monday's softer US ISM Manufacturing PMI, the USD managed to regain traction amid the optimistic outlook for the US economy. The narrative was reaffirmed by Fed Chair Jerome Powell's optimistic comments on Monday, saying that the US economy is gradually recovering from the COVID-19 crisis.
The USD was further underpinned by a modest pickup in the US Treasury bond yields, which was seen as another factor that drove flows away from the non-yielding yellow metal. Apart from this, the underlying bullish sentiment in the financial markets also did little to lend any support to the safe-haven XAU/USD.
Meanwhile, repeated failures near the $1,800 mark warrant some caution for bullish traders and make it prudent to wait for some follow-through buying before positioning for any appreciating move. That said, the downside is likely to remain cushioned ahead of Friday's release of the closely-watched US monthly jobs report (NFP).
In the meantime, traders might take cues from Tuesday's US economic docket – featuring the release of Trade Balance and Factory Orders data. This, along with the US bond yields, might influence the USD price dynamics. Apart from this, the broader market risk sentiment might also produce some trading opportunities around the XAU/USD.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY holds positive ground around 151.50 following Japanese CPI data
The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen.
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Top 3 Price Prediction BTC, ETH, XRP: Retail watches from the sidelines with a bias for shorts
Bitcoin is showing strength as markets head into the Easter holidays. As it rises, altcoins are following suit, with Ethereum and Ripple posting almost similar gains. Meanwhile, there remains an unfilled CME Gap, with a lot of liquidity also resting above and below BTC price.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.