• The prevalent risk-on mood continues to dent commodity’s safe-haven status.
• Declining US bond yields cap intraday USD uptick and helped limit deeper losses.
Gold reversed an early dip back closer to four-month tops and is currently placed at the top end of its daily trading range, around the $1274 region.
The strong overnight rally in the US equity markets, supported by upbeat earnings reports and US housing market data continued denting the precious metal's safe-haven appeal. This coupled with a follow-through US Dollar uptick exerted some additional downward pressure on the dollar-denominated commodity and collaborated to the early downtick.
The greenback, however, failed to capitalize on the intraday positive move and remained capped amid the ongoing slide in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond is down nearly 1% and seemed to be the only factor extending some support to the non-yielding yellow metal/limiting deeper losses for the time being.
In absence of any major market moving economic releases, the USD/US bond yield dynamics and the broader market risk sentiment might continue to influence the price action ahead of this week's important US macro data - including the advance Q1 GDP report on Friday, and the latest FOMC monetary policy update next Wednesday.
Technical levels to watch
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