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  • A strong pickup in the USD demand prompted some intraday selling around gold.
  • The prevalent risk-on environment further undermined the safe-haven commodity.
  • A modest pullback in the US bond yields helped limit losses for the yellow metal.

Gold seesawed between tepid gains/minor losses through the mid-European session and was last seen trading in the neutral territory, around the $1917 region.

The precious metal gains some traction during the first half of the trading action on Thursday, albeit struggled to capitalize on the move and met with some fresh supply near the $1927-28 region. A solid US dollar rebound from the lowest level in nearly three years was seen as one of the key factors that prompted some fresh selling around the dollar-denominated commodity.

Prospects for a more aggressive US fiscal spending in 2021 increased further following the Democratic sweep in the crucial US Senate runoff elections in the state of Georgia. Expectations of a larger government borrowing pushed the benchmark 10-year US government bond yield further beyond 1.0%, to the highest level since March, which, in turn, benefitted the greenback.

Apart from this, hopes for a strong global economic recovery continued boosting investors’ confidence. This was evident from the ongoing bullish run in the equity markets. The risk-on mood was seen as another factor that undermined demand for the safe-haven XAU/USD. However, a turnaround in the US bond yields extended some support to the non-yielding yellow metal.

The commodity quickly recovered $10 from intraday lows, around the $1909-08 region and was last seen trading nearly unchanged for the day. Market participants now look forward to the US economic releases – Initial Weekly Jobless Claims and ISM Services PMI. This, along with the broader market risk, might produce some short-term trading opportunities around the XAU/USD.

Technical levels to watch