A modest USD pullback helped gold find some support near the $ 1677-76 region.
The optimistic US economic outlook helped limit the dollar’s slide and earnings.
A slight disappointment from the US ADP report did little to boost momentum.
Gold extended its side consolidation price action in the mid-European session and remained confined to a tight trading range around the $ 1,680-85 region.
The precious metal managed to find some support near the $ 1,677-76 region, or the monthly lows touched on March 8, although it struggled to post a significant recovery. The US dollar witnessed some profit-taking from multi-month lows, which, in turn, was seen as a key factor benefiting dollar-denominated commodities.
However, the optimistic US economic outlook helped limit the USD’s slide and kept strong gains for the XAU / USD limited. Investors remained hopeful about the prospects for a relatively faster US economic recovery from the pandemic amid the impressive pace of coronavirus vaccination and US President Joe Biden’s spending plan.
On the economic data front, the ADP report showed that US private sector employers added 517,000 jobs in March compared to consensus estimates that point to a reading of 550,000. However, this still marked a notable increase from February’s revised upward figure of 176,000 (117,000 initially reported) and did not do much to impress USD bears.
Meanwhile, a softer tone around US Treasury yields was seen as another factor lending some support to the underperforming yellow metal. That said, the commodity’s inability to gain significant traction suggests that the recent downtrend could still be far from over and any attempted rebound could be seen as a selling opportunity.
Also on Wednesday’s US economic docket is the Chicago PMI release and pending home sales data. This will be followed by Biden’s speech at 8:20 PM, which, along with US bond yields, could influence USD price dynamics. Apart from this, the broader market risk sentiment could also provide some boost to the XAU / USD.
Technical levels
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