- A combination of factors triggers new sales around gold on Wednesday.
- The underlying bullish sentiment is seen as a key factor weighing on the safe-haven precious metal.
- A rally in US bond yields benefits the USD and added to intraday selling.
The oro has seen some selling during the European session on Wednesday and has fallen to Daily lows around the region of $ 1,721 in the last hour.
The precious metal has not been able to capitalize on the good rally of the previous day, from the lows of several months, and found new sales on Wednesday, pressed by a combination of factors. The optimistic economic outlook Global markets have continued to support underlying bullish sentiment in financial markets. This has been evident by a new momentum in the stock markets, that has weighed on the demand for XAU / USD as a safe haven.
Investors remain optimistic amid the impressive rate of COVID-19 vaccination and progress of the $ 1.9 trillion pandemic aid package of US President Joe Biden. Reflation trading has fueled expectations of a possible rebound in inflation and has raised doubts that the Fed will keep interest rates ultra-low for a longer period. This has been seen as another factor that has put some pressure on the yellow metal.
In the meantime, a modest rebound in US Treasury yields has offered some support to the US dollar, which has further contributed to the sales tone around gold, denominated in dollars. Now it will be interesting to see if the XAU / USD is able to attract lower buying or the emergence of some new selling on Wednesday supports the prospects for a well-established recent downtrend extension.
Market participants are now awaiting the US economic calendar, highlighting the release of the ADP report on private sector employment and ISM’s services PMI. This, along with US bond yields, could influence USD price dynamics. Investors could follow the signs of broader market risk sentiment to seize some short-term opportunities.
Gold technical levels
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