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  • Gold reversed an early dip and turned positive for the second straight session on Tuesday.
  • A softer tone surrounding the USD was seen as a key factor that benefitted the commodity.
  • The upbeat market mood, a goodish pickup in the US bond yields might cap further gains.

Gold climbed to fresh two-week tops, around the $1919 region during the early North American session, albeit lacked any strong follow-through.

Following an early dip to the $1906 area, the precious metal regained some positive traction and added to the previous day’s goodish recovery move of around $30 from two-day lows. A mildly softer tone surrounding the US dollar was seen as one of the key factors that extended some support to the dollar-denominated commodity.

However, the upbeat market mood – as depicted by a positive trading sentiment around the equity markets – undermined demand for traditional safe-haven assets. The risk-on flow was further reinforced by a strong pickup in the US Treasury bond yields, which further collaborated towards capping gains for the non-yielding yellow metal.

Investors might also refrain from placing bets, rather prefer to wait on the sidelines ahead of the Fed Chair Jerome Powell’s scheduled speech. Powell’s remarks might influence the USD price dynamics, which along with the broader market risk sentiment will assist traders to grab some short-term opportunities.

It will now be interesting to see if bulls are able to capitalize on the positive move or the XAU/USD runs out of the steam at higher levels amid absence relevant market moving economic releases from the US.

Technical levels to watch