- Risk-on atmosphere doesn’t allow gold to recover its losses.
- US Dollar Index clings to modest gains following last week’s sharp fall.
- 10-year US T-bond yield adds more than 2% on Monday.
The troy ounce of the precious metal gained more than $30 last week boosted by stronger demand for safer assets, China’s extended gold-buying amid the ongoing trade conflict with the U.S., and a broadly weaker greenback. At the start of the new week, however, the XAU/USD pair staged a deep correction and lost more than 1% before rebounding modestly in the last hours. As of writing, the pair was down nearly $11.50, or 0.85%, on the day at $1329.
The improved sentiment following the news of the U.S. reaching a deal with Mexico and cancelling tariffs allowed global equity indexes and the 10-year US Treasury bond yield gain traction, making it difficult for traditional safe-havens to find demand. Additionally, during an interview with CNBC, U.S. President Donald Trump said that he believed that the trade deal with China will work out.
On the other hand, the US Dollar Index took advantage of the surging bond yields and caused the bearish pressure on the pair to remain intact. As of writing, the DXY was up 0.25% on the day at 96.80. Meanwhile, the only data from the U.S. today revealed that JOLTS job openings decreased to 7.449 million in April from 7.474 million in March but was largely ignored by the participants. There won’t be any macroeconomic data releases in the remainder of the day and the market’s risk-perception could stay as the primary driver of the pair’s price action.
Technical levels to watch for
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