- Gold witnessed a modest pullback from the $1,800 neighbourhood, or near two-month tops.
- A goodish rebound in the US bond yields prompted some profit-taking around the commodity.
- A subdued USD demand, fresh COVID-19 jitters should help limit the downside for the metal.
Gold extended its steady intraday descent and dropped to fresh daily lows, around the $1,782 region during the mid-European session.
The precious metal witnessed a modest pullback from the vicinity of the $1,800 mark and has now eroded a major part of the previous day's positive move to the highest level since late February. A goodish intraday bounce in the US Treasury bond yields was seen as a key factor that prompted traders to lighten their bullish bets around the non-yielding yellow metal.
That said, a combination of factors could help limit any meaningful downside for the XAU/USD. Renewed fears about another dangerous wave of coronavirus infections in some countries continued weighing on investors' sentiment. This was evident from the prevalent cautious mood around the equity markets, which should extend some support to the safe-haven commodity.
Apart from this, a subdued US dollar price action should also act as a tailwind and attract some dip-buying around the dollar-denominated commodity. The USD languished near multi-week lows amid diminishing odds for an earlier Fed lift-off. The USD bulls seemed rather unimpressed following the release of better-than-expected Jobless Claims data.
The number of Americans who filed for unemployment insurance for the first time fell to 547K during the week ended April 16. This was well below consensus estimates indicating a rise to 617K from the previous week's upwardly revised reading of 586K (576K reported earlier). The data, however, did little to provide any meaningful impetus to the USD.
The fundamental backdrops warrant some caution for bearish traders. Even from a technical perspective, last week's sustained breakthrough the bullish double-bottom neckline hurdle near the $1,760-65 region supports prospects for additional gains. Hence, any subsequent fall might still be seen as a buying opportunity and remain limited.
Technical levels to watch
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