- The prevalent risk-on mood weighed on the precious metal’s safe-haven status.
- Some follow-through USD buying exerted some additional downward pressure.
- A US-China spat over the origin of the coronavirus might help limit deeper losses.
Gold traded with a mild negative bias through the mid-European session and is currently placed near the lower end of its daily trading range, around the $1700 mark.
The latest optimism over the easing of coronavirus-induced lockdowns in some parts of the world continued lending some support to investors’ appetite for riskier assets.
This was evident from a positive mood around the equity markets, which eventually turned out to be one of the key factors that weighed on the precious metal’s safe-haven status.
Adding to this, some follow-through US dollar strength, primarily led by weakness in the European currencies, exerted some additional pressure on the dollar-denominated commodity.
However, concerns about the second wave of a spike in the virus infections, coupled with a US-China spat over the origin of the coronavirus helped limit deeper losses, at least for now.
It is worth recalling that the US President Donald Trump has threatened to impose tariffs on Chinese goods in retaliation to its cover-up and mishandling of the virus at the early stage.
The commodity remains well within a three-day-old trading range, making it prudent to wait for some strong follow-through selling before positioning for any further near-term depreciating move.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of the ADP report on private-sector employment, for some short-term trading opportunities.
Technical levels to watch
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