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  • Improved market sentiment weighs on the precious metal.
  • The 10-year US T-bond yield stages decisive rebound from multi-week lows.
  • Wall Street pares early losses, moves into the positive territory.

Since the start of the week, the risk-averse atmosphere allowed the precious metal to find demand as a traditional safe-haven and helped the XAU/USD pair advance above the $1290 mark for the first time since April 12. However, with the market sentiment finally improving in the NA session, gold  lost its strength and erased  this week’s gains. As of writing, the XAU/USD pair was down 0.27% on the day at $1280.

Although there were no fresh headlines on the U.S.-China trade conflict that suggested it was likely for sides to reach an agreement, the fact that the official notice of tariff hikes on Chinese imports showed up in the U.S. Federal Register today suggested that China might soften its tone to finalise a deal that could please the U.S. Additionally, Trump tweeted out that Chinese Vice-Premiere was coming to the U.S. to “make a deal.”

Reflecting the improved market sentiment, the yield on the 10-year US Treasury bond rebounded from the 5-week low that it set earlier today and was last seen up 0.5% on the day. Furthermore, major equity indexes in the U.S. moved into the positive territory after starting the day in the negative territory for the third straight day.

Meanwhile, the US Dollar Index, which spent a large portion of the day moving sideways near 97.50,  is now posting small gains above 97.60, allowing the bearish pressure on the pair to remain intact.

Technical levels to consider

The pair could face the initial resistance at $1290 (daily high/50-DMA) ahead of $1298/$1300 (100-DMA/psychological level) and $1309 (Apr. 11 high). On the downside, supports could be seen at $1279 (20-DMA), $1274 (Apr. 26 low) and $1266 (Apr. 23 low).