- Gold witnessed an intraday turnaround from multi-year tops set earlier this Wednesday.
- A pickup in the US bond yields revived the USD demand and prompted some profit-taking.
- Positive news about COVID-19 vaccine further contributed to the intraday selling pressure.
Gold extended its steady intraday retracement slide from multi-year tops and dropped to fresh daily lows, around the $1765 region in the last hour.
Growing worries about the second wave of coronavirus infections assisted the precious metal to build on its recent gains and climb to the highest level since October 2012, around the $1789 region. However, a combination of factors kept a lid on any further gains, rather prompted some profit-taking.
The US dollar managed to attract some buying during the European session and was seen as one of the key factors that capped gains for the dollar-denominated commodity. This coupled with a strong pickup in the US Treasury bond yields further drove flows away from the non-yielding yellow metal.
The USD held steady and seemed largely unaffected by the ADP report, which showed that private-sector employment rose by 2369K in June. The reading was lower than 3000K expected but was largely negated by an upward revision of the previous month’s reading to +3065K as against -2760 reported earlier.
Adding to this, positive headlines related to the development of a vaccine for COVID-19 boosted the global risk sentiment and dented demand for traditional safe-haven assets. This, in turn, led to the latest leg of the downfall over the past hour, which dragged the commodity to the $1765 region.
The commodity maintained its heavily offered tone and failed to gain any respite following the release of stronger-than-expected US ISM Manufacturing PMI. In fact, the gauge unexpectedly moved back into the expansion territory and came in at 52.6 for June as compared to 49.5 expected.
The metal snapped four consecutive days of the winning streak and has also erased the previous day’s positive move. Some follow-through selling below weekly lows would now set the stage for an extension of the corrective slide further towards the $1750 strong horizontal support.
Technical levels to watch
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