- Gold struggled to gain any meaningful traction on Wednesday.
- The downside remains cushioned amid economic uncertainty.
- Stronger USD, improving risk sentiment seemed to cap gains.
Gold extended its consolidative price action through the early North-American session and is currently placed in the neutral territory, around the $1650 zone.
Despite disappointing news surrounding the coronavirus outbreak, the precious metal struggled to gain any meaningful traction and seesawed between tepid gains/minor losses through the major part of Wednesday’s trading action.
The US reported its highest single-day increase in fatalities from the COVID-19 pandemic on Tuesday and fueled concerns over an imminent global recession, which provided a modest lift to the commodity’s safe-haven status.
This coupled with expectations of a prolonged period of low/negative interest rates and aggressive stimulus measures extended some additional support to the non-yielding yellow metal, albeit bulls lacked any strong conviction.
Meanwhile, a goodish pickup in the US dollar demand kept a lid on the upside for the dollar-denominated commodity. This coupled with a positive mood around the equity markets further collaborated towards capping gains.
Investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the release of the FOMC meeting minutes and fresh developments surrounding the coronavirus saga.
Hence, it will be prudent to wait for a sustained break in either direction before positioning for any meaningful intraday momentum amid absent relevant market moving economic releases from the US.
Technical levels to watch
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