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  • Gold witnessed some intraday pullback from multi-week tops amid improving risk sentiment.
  • The prevailing USD selling bias extended some support and helped limit the early downtick.

Gold reversed an early dip to the $1644 region and is currently placed in the neutral territory, well within the striking distance of multi-week tops set earlier this Tuesday.

The global equity markets enjoyed a second day of strong gains on Tuesday amid signs that the coronavirus pandemic may be reaching its peak in Europe and the United States. The risk-on mood dented the precious metal’s safe-haven status and led to some intraday pullback.

Despite the latest optimism, concerns over an imminent global recession continued fueling expectations of a prolonged period of low/negative interest rates and aggressive stimulus measures. This eventually extended some support to the non-yielding yellow metal.

This coupled with some US dollar long-unwinding further underpinned the dollar-denominated commodity and helped limit the early downtick. Meanwhile, surging US Treasury bond yields failed to impress the USD bulls, albeit might turn out to be the only factor capping gains.

In the absence of any major market-moving economic releases from the US, the commodity remains at the mercy of the USD price dynamics. Apart from this, developments surrounding the coronavirus might influence the market risk sentiment and produce some meaningful trading opportunities.

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