- Gold struggled to capitalize on the overnight positive move and remained confined in a range.
- Doubts over a potential COVID-19 vaccine, some renewed USD selling extended some support.
- Indications of a strong opening in the US equity markets capped gains ahead of FOMC minutes.
Gold edged lower during the early North American session and refreshed daily lows, around the $1743-42 region, albeit lacked any strong follow-through.
A combination of diverging forces failed to provide any meaningful impetus or assist the precious metal to build on the overnight positive move, instead led to a subdued/range-bound trading action on Wednesday.
Hopes for a potential vaccine for treating the deadly coronavirus faded rather quickly after reports on Tuesday indicated that the US drugmaker Moderna had provided insufficient data to determine the vaccine’s efficacy. This coupled with the emergence of some fresh US dollar selling on Wednesday further benefitted the dollar-denominated commodity.
Meanwhile, the supporting factors, to a larger extent, were negated by indications of a strong opening in the US equity markets. This, in turn, undermined the precious metal’s perceived safe-haven status and led to a modest pullback in the last hour or so.
Apart from this, investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the release of the minutes of the latest FOMC meeting. The minutes will be closely scrutinized for clues about the Fed’s future policy path, which will play a key role in influencing the near-term direction for the non-yielding yellow metal.
Technical levels to watch
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