- Intraday pickup in the USD demand prompted some fresh selling.
- Softer mood/sliding US bond yields helped limit any deeper losses.
Gold failed to capitalize on the early uptick to $1495 area and turned lower for the second consecutive session, dropping to over one-week low in the last hour.
Against the backdrop of growing optimism over a partial US-China trade deal, a modest US Dollar uptick since the early European session turned out to be one of the key factors that exerted some fresh downward pressure on the dollar-denominated commodity.
Focus remains on the Fed
This coupled with possibilities of some short-term trading stops being triggered below the overnight swing lows, around the $1490 region, further collaborated towards aggravating the intraday bearish pressure, though a combination of factors helped limit the downside.
A slightly softer tilt in the risk mood around equity markets underpinned the precious metal’s perceived safe-haven demand. This coupled with Fed rate cut expectations and a sharp intraday slide in the US Treasury bond yields further extended some support to the non-yielding yellow metal.
Hence, it will be prudent to wait for some strong follow-through selling before confirming any further downside as investors start repositioning for the upcoming key event risk – the highly anticipated FOMC monetary policy decision on Wednesday.
Heading into the key event risk, Tuesday US economic docket – featuring the release of the Conference Board’s Consumer Confidence Index and pending home sales data – might be looked upon for some short-term trading opportunities during the early North-American session.
Technical levels to watch
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