- Gold turns lower for the third consecutive session on Tuesday.
- A stronger USD was seen as a key factor exerting some pressure.
- The risk-off mood failed to lend support to the safe-haven metal.
Gold struggled to capitalize on its early uptick to the $1884 area and has now drifted into the negative territory for the third consecutive session. The commodity was last seen trading around the $1870 region, down around 0.50% for the day.
Following the previous day’s good two-way price swings, the precious metal managed to gain some positive traction during the Asian session on Tuesday and was supported by the anti-risk flow. Investors turned cautious amid fears that a highly infectious new strain of coronavirus could lead to a slower global economic recovery. This, in turn, provided a modest lift to the safe-haven XAU/USD.
The supporting factor, to a larger extent, was offset by a stronger US dollar, which tends to undermine demand for the dollar-denominated commodity. Concerns about the economic fallout from the imposition of fresh COVID-19 restrictions overshadowed the passage of additional US fiscal stimulus measures and continued benefitting the greenback’s status as the global reserve currency.
It is worth reporting that the US House of Representatives passed a long-awaited $892 billion coronavirus aid package on Monday, alongside a $1.4 trillion measure to keep the government funded for another year. The bill is now under review by the Senate and will become law once passed and signed by the US President Donald Trump. The positive development, however, did little to impress bulls.
Despite the pullback, the XAU/USD remained well with the previous day’s broader trading range and the price action warrants some caution before placing any aggressive directional bets. Investors now look forward to the US economic docket – featuring the releases of the final Q3 GDP report, Richmond Fed Manufacturing Index, Conference Board’s Consumer Confidence Index and Existing Home Sales.
In the meantime, the broader market risk sentiment, along with the USD price dynamics will play a dominant role in influencing the commodity and assist traders to grab some short-term opportunities.
Technical levels to watch
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