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Gold struggles pull away from May lows, continues to trade near $1270

  • Positive risk sentiment weighs on the precious metal.
  • Wall Street and 10-year US T-bond yield push higher on Tuesday.
  • US Dollar Index climbs above 98 handle to intensify the bearish pressure.

The XAU/USD pair closed the first day of the week virtually flat below the $1280 mark and came under a renewed pressure on Tuesday as the upbeat market sentiment didn’t allow the precious metal to find demand as a safe-haven. After touching its lowest level since May 3rd at  $1269.57, the pair stage a technical correction and was last seen down 0.4% on the day at $1272.50.

The U.S. decision to ease the ban on China’s Huawei helped major equity indexes in the U.S. start the day sharply higher on Tuesday. Moreover, the 10-year US T-bond yield rose for the third straight day today to reflect the elevated risk-appetite. At the moment, the Nasdaq Composite is adding more than 1% on the day while the broader S&P 500 is adding 0.85%.  

On the other hand, rising T-bond yields and the selling pressure surrounding the major European currencies caused capital to flow towards the greenback, lifting the US Dollar Index to its highest level in three weeks and keeping the bearish pressure on the pair intact. Meanwhile, the only data from the U.S. today showed that existing home sales declined by 0.4% in April but was largely ignored by the market participants. As of writing, the DXY was up 0.15% on the day at 98.07.

Later in the session, markets will be paying close attention to FOMC members Rosengren and Evans’ speeches.

Technical levels to watch for


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