Gold off lows, still in the red around $1485 region

• Gold met with some fresh supply on Tuesday amid a combination of negative factors.
• A modest recovery in the global risk sentiment dented the metal’s safe-haven status.
• Rebounding US bond yields revived the USD demand and added to the selling pressure.

Gold maintained its offered tone near the lower end of its daily trading range, around the $1485 region and remained well within the striking distance of over one-month lows set on Monday.

Having failed to capitalize on the overnight bounce to levels beyond the key $1500 psychological mark, the precious metal came under some renewed selling pressure and was being weighed down by a combination of negative factors.

A modest recovery in the global risk sentiment dented the precious metal’s perceived safe-haven status and was seen as one of the key factors that triggered the initial leg of downfall for the seventh consecutive session on Tuesday.

The risk-on flow allowed the US Treasury bond yields to stage a solid bounce, which assisted the US dollar to recover the overnight losses led by the Fed’s aggressive policy easing and further weighed on the non-yielding yellow metal.

The greenback held on to its strong gains following the release of weaker US monthly retail sales figures. The data, however, added fuel to concerns over a negative economic impact from the coronavirus pandemic and extended some support to the commodity.

This coupled with the fact that the metal has still managed to hold its neck above the overnight swing lows, around the $1450 horizontal support amid slightly oversold conditions on the daily chart, warranting some caution for aggressive bearish traders.

Hence, it will be prudent to wait for some strong follow-through selling below the mentioned support before positioning for any further near-term depreciating move, possibly towards challenging the $1400 round-figure mark.

Technical levels to watch