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  • Gold failed to capitalize on the early uptick amid fading safe-haven demand.
  • Stronger USD, surging US bond yields further collaborated to the intraday slide.
  • Stellar ADP report does little to provide any impetus ahead of US ISM PMI.

Gold held near the lower end of its daily trading range, around the $1552-53 region and had a rather muted reaction to the US ADP report.

The precious metal failed to capitalize on its intraday positive move to levels just above the $1560 region, rather met with some fresh supply in reaction to reports on coronavirus treatment. The headlines boosted investors’ confidence and dented the precious metal’s perceived safe-haven status.

The global risk-on rally was further reinforced by a strong upsurge in the US Treasury bond yields, which further played their part in driving flows away from the non-yielding yellow metal. The stronger US dollar exerted some additional pressure on the dollar-denominated commodity.

The bid tone surrounding the greenback remained unabated after the latest ADP report showed that the private sector employers added 291K new jobs in January. The reading surpassed even the most optimistic estimates and also marked the best since May 2015.

Meanwhile, the market reaction turned out to be rather muted as investors seemed reluctant, rather preferred to wait for confirmation of strong labor market from the official jobs report, popularly known as NFP, scheduled to be released on Friday.

Wednesday’s US economic docket also features the release of ISM Non-Manufacturing PMI, which might influence the USD price dynamics and produce some meaningful trading opportunities.

Technical levels to watch