- Gold witnessed a modest pullback from the $ 1,800 zone, or near the two-month highs.
- A positive rally in US bond yields sparked some profit-taking around the commodity.
- Moderate USD demand, fresh COVID-19 nerves should help limit the metal’s slide.
The oro it extended its steady intraday decline and fell to new daily lows, around the $ 1,782 zone during the middle of the European session.
The precious metal witnessed a modest pullback from the $ 1,800 level and has now retraced a significant part of the positive move from the previous day to the highest level since late February. A good intraday bounce in US Treasury yields was seen as a key factor that prompted traders to lighten their bullish bets on the underperforming yellow metal.
That said, a combination of factors could help limit any significant decline for the XAU / USD. Renewed fears about another dangerous wave of coronavirus infections in some countries continued to weigh on investor sentiment. This was evident from the cautious climate prevailing in equity markets, which should provide some support to safe haven commodities.
Aside from this, a subdued US dollar price action should also act as a tailwind and attract some buying on the dips around the dollar-denominated commodity. The USD languished near multi-week lows amid diminishing odds of an earlier Fed takeoff. USD bulls seemed rather unimpressed following the release of better-than-expected data on jobless claims.
The number of Americans applying for unemployment insurance for the first time fell to 547,000 during the week ending April 16. This was well below consensus estimates indicating an increase to 617,000 from the prior week’s revised upward reading of 586,000 (576,000 previously reported). However, the data did little to provide a significant boost to the USD.
The fundamental background warrants some caution for bearish traders. Even from a technical perspective, last week’s sustained advance, the bullish hurdle near the $ 1,760-65 region supports the prospects for additional earnings. Therefore, any subsequent decline could be seen as a buying opportunity.
Technical levels
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