- The prevailing risk-on mood continues to dent the commodity’s safe-haven status.
- The USD remained supported by recovering US bond yields and add to the pressure.
- Slight disappointment from the headline US PPI print for May helped limit deeper losses.
Gold continued losing ground through the early North-American session and tumbled to fresh one-week lows, around the $1320 region in the last hour, albeit recovered a bit thereafter.
Against the backdrop of the latest encouraging trade-related development, the precious metal added to the previous session’s steep declines and remained under some heavy selling pressure for the second consecutive session on Tuesday.
Investors’ appetite for riskier assets got an additional by China’s efforts to bolster economic growth and was evident from the prevailing bullish trading sentiment around equity markets, which dampened the precious metal’s safe-haven demand.
This coupled with a follow-through rally in the US Treasury bond yields helped the US Dollar to preserve the overnight recovery gains and further collaborated towards driving flows away from the dollar-denominated commodity.
Investors appeared to have shrugged off a lack of positive rhetoric around the US-China trade talks, with firming expectations that the Fed will be forced to cut interest rates this year also doing little to lend any support to the non-yielding yellow metal.
On the economic data front, Tuesday’s softer-than-expected US Produce Price Index (PPI), coming in to show that the headline PPI decelerated to 1.8% yearly rate in May, turned out to be the only factor that helped limit deeper losses, rather rebound from daily lows.
Technical levels to watch
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