- The sustained selling of the USD helped gold regain positive traction on the first day of a new week.
- A modest recovery in US bond yields, the underlying bullish tone could limit the commodity.
- Investors await the release of US durable goods orders for a new trade boost.
The oro It reversed an initial drop from the early European session to the $ 1,775 zone and has now returned to the upper end of its daily trading range. The commodity was last seen hovering around the $ 1,781-82 region, up more than 0.20% on the day.
The precious metal managed to regain some positive traction on the first day of a new trading week and, for now, it appears to have broken two consecutive days of the losing streak. The rally was solely sponsored by the prevailing bearish sentiment around the US dollar, which tends to benefit the dollar-denominated commodity.
Investors now appear to be convinced that the Fed will keep interest rates near zero for a longer period. This was seen as a key factor that continued to weigh on the dollar during the first half of the trading action. That being said, a combination of factors could prevent the bulls from placing aggressive bets and limiting gains for the XAU / USD.
A modest rally in US Treasury yields, for the time being, helped limit the USD’s slide. This, in turn, should contain any uncontrolled rally by the yellow metal that does not yield. Aside from this, the underlying bullish tone in financial markets could act as a headwind for the XAU / USD safe haven.
Even from a technical perspective, the commodity has repeatedly failed near $ 1,800 in the last three trading sessions. This makes it prudent to wait for some follow-up buying before positioning for an extension of the recent bounce from the $ 1,677-76 area, which constituted the formation of a double bottom.
Market participants are now looking forward to the US economic agenda, highlighting the release of Durable Goods Orders later during the early days of the American session. Other than this, US bond yields could influence the USD. Traders will follow the signals of the broader market risk sentiment for some short-term opportunities around the XAU / USD.
Technical levels
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