- Gold struggled to capitalize on its positive intraday move and remained confined to a range.
- The underlying bullish sentiment, the rally in US bond yields, contributed to the restraint.
- The bias appears tilted in favor of bearish traders and supports the prospects for further weakness.
The oro it continued its fight for a firm intraday direction and remained confined in a range below the $ 1,810 level for the middle of the European session.
The US dollar witnessed some new selling in reaction to Tuesday’s dovish comments from Fed Chairman Jerome Powell. This, in turn, was seen as a key factor that helped the dollar-denominated commodity take advantage of the previous day’s rebound from levels below $ 1,800.
However, a combination of factors kept any further gains for the XAU / USD limited. Investors remained optimistic about the global economic outlook amid the launch of COVID-19 vaccines and the progress of the $ 1.9 trillion stimulus package proposed by US President Joe Biden.
This was evident by the underlying bullish tone in financial markets, which prevented the bulls from making aggressive bets on the safe-haven commodity. Apart from this, a modest rally in US Treasury yields did even more to limit the yellow metal that does not perform.
The market has been reacting strongly to the prospects of a massive US fiscal spending plan and has pushed the benchmark 10-year US government bond yield closer to one-year highs. Therefore, any significant positive movement could be seen as an opportunity for bearish traders.
Market participants are now looking forward to Powell’s second day of testimony before the House Financial Services Committee, which could weigh on US bond and USD yields. This, coupled with the broader market risk sentiment, could lead to some trading opportunities around the XAU / USD.
Technical levels
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