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  • Gold witnessed some selling on Friday amid a turnaround in the global risk sentiment.
  • A sudden pickup in the USD demand further contributed to the slide below $1700 mark.
  • The downside seems limited amid concerns over the economic fallout from the pandemic.

Gold maintained its offered tone through the early European session and is currently placed near the lower end of its daily trading range, below the $1700 mark.

The commodity extended the previous day’s retracement slide from the vicinity of the $1740 region and witnessed some follow-through selling on the last trading day of the week. The downtick was sponsored by a combination of negative factors and dragged the metal further away from multi-year tops set on Tuesday.

The US President Donald Trump hinted at the reopening of the US economy, which accompanied with the latest optimism over the treatment for COVID-19 virus provided a strong boost to investors’ confidence. This triggered a strong rally in the global equity markets and dented the precious metal’s safe-haven status.

This coupled with some renewed US dollar buying exerted some additional pressure on the dollar-denominated commodity and contributed to slide below the $1700 round-figure mark. The greenback regained some traction after Gilead Sciences issued a note of caution on their antiviral drug Remdesivir.

However, expectations of a prolonged period of low/negative interest rates and aggressive government stimulus measures might continue lending some support to the non-yielding yellow metal. 
This might eventually help limit deeper losses amid absent relevant market-moving economic releases on Friday.

This coupled with concerns over the economic fallout from the coronavirus pandemic might further hold investors from placing any aggressive bearish bets. Hence, it will be prudent to wait for some strong follow-through selling before confirming that the commodity might have topped out in the near-term.

Technical levels to watch