- Gold is moving lower and reaches new lows of more than a week.
- A rally in US bond yields benefits the USD and triggers some selling around the XAU / USD.
- US GDP optimism and risk appetite weigh on the safe-haven precious metal.
The oro has seen some aggressive selling at the start of the American session on Thursday and has fallen below the support zone of $ 1,765-60, at levels last seen on April 15. At the time of writing, the XAU / USD remains under pressure in the daily lows zone and is approaching the $ 1,750 level.
A combination of factors has not helped the precious metal capitalize on its positive intraday movement and triggered new sales around the region of $ 1,790. The underlying bullish sentiment in financial markets it has acted as a headwind for the safe haven XAU / USD and limited the initial rally.
Despite concerns about the continued rise in new COVID-19 cases in some countries, investors remain optimistic about the prospects for a strong global economic recovery. Additionally, US President Joe Biden’s $ 1.8 trillion aid package for families and education has further boosted investor confidence.
The drop could also be attributed to a modest rally in the US dollar from lows of more than two months. A stronger USD tends to weigh on demand for dollar-denominated commodities, like gold. A strong rally in US Treasury yields appeared to be the only factor supporting the dollar.
USD bulls seem rather unimpressed by Thursday’s release of the US advanced GDP report, which has shown that the world’s largest economy expanded at an annualized rate of 6.4% in the first quarter. This data has come well above the 4.3% increase registered in the previous quarter and better than market expectations.
Meanwhile, the emergence of some new selling suggests that the market has already taken in the pessimistic message from the Fed. This, in turn, supports the prospects for a significant decline for the underperforming yellow metal. Sustained weakness below the $ 1,765-60 region will reaffirm bearish outlook.
Gold technical levels
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