- The prevalent USD selling bias assisted gold to attract some dip-buying.
- The risk-on environment capped the upside for the safe-haven commodity.
- Sustained move beyond $1748 needed to confirm a near-term bullish bias.
Gold reversed an early dip to the $1735 region and has now moved back closer to over one-week tops set in the previous session.
The global risk sentiment remained well support by growing optimism over the global economic recovery. The same was evident from a positive trading sentiment around the equity markets, which exerted some pressure on the precious metal’s safe-haven status.
However, the prevalent US dollar bearish pressure helped limit any meaningful downfall for the dollar-denominated commodity. The greenback remained depressed in the wake of the widespread protests in dozens of American cities over the death of George Floyd.
This comes amid concerns about worsening relations between the United States and China, which further cushioned the downside for the commodity. In the latest development, China halted orders of US agricultural products, including soybeans, and also cancelled some pork orders.
Despite the supporting factors, the yellow metal lacked any strong bullish conviction. Investors now seemed to wait for a fresh catalyst in order to determine the commodity’s near-term trajectory. This warrants some caution before placing any aggressive directional bets.
Even from a technical perspective, the commodity needs to find bullish acceptance above the recent daily closing highs resistance near the $1748 level. Above the mentioned level, bulls are likely to aim to retest multi-year swing highs, around the $1765 area.
Technical levels to watch
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