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  • Improving global risk sentiment dented the precious metal’s relative safe-haven status.
  • The USD remains supported by a pickup in the US bond yields and add to the selling bias.
  • Investors seemed reluctant to place aggressive bets ahead of Powell’s scheduled speech.

Gold traded with a mild negative bias through the mid-European session on Friday and is currently placed at the lower end of its weekly trading range, just above $1495 level.
A combination of factors kept exerting some downward pressure for the third consecutive session – also marking the commodity’s fifth day of the downtick in the previous six – albeit bulls, so far, have managed to defend the $1493-92 horizontal support. The prevalent risk-on mood, as depicted by a positive trading mood around equity markets, was seen as one of the key factors weighing on the precious metal’s perceived safe-haven status.

Risk-on mood/stronger USD exert some pressure

Improving global risk sentiment was further reinforced by a goodish pickup in the US Treasury bond yields, which eventually underpinned the US Dollar demand and further collaborated towards driving flows away from the dollar-denominated commodity. However, the downside remains cushioned as investors now seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of the Fed Chair Jerome Powell’s scheduled speech.
Given that another rate cut in the September meeting is fully priced in, Powell’s comments will be closely scrutinized to find out if the central bank is prepared to slash rates further. Should Powell refrain from signalling aggressive policy easing, the USD is more likely to build on its recent strength and exert some fresh downward pressure on the non-yielding yellow metal.

Technical levels to watch