- Renewed USD selling bias assisted gold to gain traction for the second consecutive day.
- The upbeat market mood, rallying US bond yields capped any further gains for the metal.
- Investors now eye Yellen’s confirmation hearing for some short-term trading opportunities.
Gold maintained its bid tone through the mid-European session, albeit seemed struggling to capitalize on the intraday positive move. The commodity was last seen trading around the $1840 region, well within the striking distance of session lows.
The precious metal built on the previous day's goodish recovery move from the vicinity of the $1800 mark and gained traction for the second consecutive session on Tuesday. The uptick was exclusively sponsored by the emergence of some selling around the US dollar, which tends to underpin demand for the dollar-denominated commodity.
The USD's pullback from near one-month tops could be solely attributed to some profit-taking ahead US Treasury Secretary nominee Janet Yellen's confirmation hearing later this Tuesday. Reports indicated that Yellen will urge lawmakers to act big to a protracted downturn and also outline the need for the proposed $1.9 trillion COVID-19 relief package.
Meanwhile, the market has been pricing in the prospects for more aggressive US fiscal spending in 2021 under Joe Biden's presidency. Expectations of a larger government borrowing were evident from the recent strong rally in the US Treasury bond yields. This, in turn, was seen as a key factor keeping a lid on strong gains for the non-yielding yellow metal.
Apart from hopes for additional US stimulus measures, the optimism over the rollout of vaccines for the highly contagious coronavirus disease continued boosting investors' confidence. This was evident from the underlying bullish sentiment in the equity markets, which further weighed on the safe-haven XAU/USD and capped the upside, at least for now.
In the absence of any major market-moving economic releases from the US, the precious metal remains at the mercy of the USD price dynamics and the broader market risk sentiment. This, along with the US bond yields and developments surrounding the coronavirus saga, might assist traders to grab some short-term opportunities on Tuesday.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD bounces off lows, retests 1.1370
Following an early drop to the vicinity of 1.1310, EUR/USD now manages to regain pace and retargets the 1.1370-1.1380 band on the back of a tepid knee-jerk in the US Dollar, always amid growing optimism over a potential de-escalation in the US-China trade war.
GBP/USD trades slightly on the defensive in the low-1.3300s
GBP/USD remains under a mild selling pressure just above 1.3300 on Friday, despite firmer-than-expected UK Retail Sales. The pair is weighed down by a renewed buying interest in the Greenback, bolstered by fresh headlines suggesting a softening in the rhetoric surrounding the US-China trade conflict.
Gold remains offered below $3,300
Gold reversed Thursday’s rebound and slipped toward the $3,260 area per troy ounce at the end of the week in response to further improvement in the market sentiment, which was in turn underpinned by hopes of positive developments around the US-China trade crisis.
Ethereum: Accumulation addresses grab 1.11 million ETH as bullish momentum rises
Ethereum saw a 1% decline on Friday as sellers dominated exchange activity in the past 24 hours. Despite the recent selling, increased inflows into accumulation addresses and declining net taker volume show a gradual return of bullish momentum.
Week ahead: US GDP, inflation and jobs in focus amid tariff mess – BoJ meets
Barrage of US data to shed light on US economy as tariff war heats up. GDP, PCE inflation and nonfarm payrolls reports to headline the week. Bank of Japan to hold rates but may downgrade growth outlook. Eurozone and Australian CPI also on the agenda, Canadians go to the polls.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.