- Gold edged higher for the second straight session on Wednesday.
- The upbeat market mood, a modest USD uptick capped the upside.
- Investors now await FOMC minutes for some meaningful impetus.
Gold struggled to capitalize on its modest intraday gains and was seen oscillating in a range, around the $1750 region through the early part of European trading session.
Reports that the US drugmaker Moderna had provided insufficient data to determine the vaccine’s efficacy casted doubts on a potential vaccine for the deadly virus. This, in turn, forced investors to take refuge in traditional safe-haven assets and assisted the precious metal to gain some traction for the second consecutive session on Wednesday.
However, a strong rally in the US equity futures, coupled with a modest pickup in the US dollar demand kept a lid on any additional gains for the dollar-denominated commodity. Meanwhile, a fresh leg down in the US Treasury bond yields capped any strong USD positive move and extended some support to the non-yielding yellow metal, at least for now.
The combination of diverging forces led to a subdued/range-bound trading action, warranting some caution before positioning for any meaningful intraday movement. Meanwhile, the fact that this week’s pullback from multi-year tops attracted some dip-buying, the near-term bias still seems tilted in favour of bullish trades and supports prospects for additional gains.
Later during the US trading session, the release of the minutes of the latest FOMC meeting might provide a fresh impetus and assist traders to grab some short-term opportunities. Heading into Wednesday’s key release, the commodity seems more likely to continue with its consolidative price moves and remains at the mercy of the broader market risk sentiment/USD price dynamics.
Technical levels to watch
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