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   “¢   A modest uptick in the US bond yields exerts some pressure at higher levels.
   “¢   The prevalent USD selling bias/risk-off mood helped limit any sharp pullback.
   “¢   Traders refrain from placing fresh bets ahead of Wednesday’s FOMC decision.

Gold traded with a mild positive bias and managed to hold its neck above the $1280 level, albeit trimmed a part of its early strong gain during the early North-American session.

The precious metal failed to capitalize on its intraday positive momentum and witnessed a modest pullback from session high level of $1286.25. The latest leg of a sudden drop over the past couple of hours or so was primarily led by a modest rebound in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.

However, the prevalent US Dollar selling bias extended some support to the dollar-denominated commodity. The already weaker sentiment surrounding the greenback deteriorated further following the disappointing release of Chicago PMI, which fell to its lowest level since January 2017 and came in at 52.6 in April as compared to 58.7 recorded in the previous month.

This coupled with a slight deterioration in risk sentiment, as depicted by a weaker trading sentiment around equity markets, underpinned demand for traditional safe-haven assets and remained supportive of the bid tone surrounding the precious metal. The uptick, however, lacked any strong bullish conviction as investors still seemed reluctant to place aggressive bets ahead of the latest FOMC monetary policy update on Wednesday.

Hence, it would be prudent to wait for a strong follow-through buying before traders start positioning for any further near-term appreciating move. Next on tap will be the release of Conference Board’s consumer confidence index and pending home sales data from the US, which might be looked upon to grab some short-term trading opportunities.

Technical levels to watch