- Gold prices print two-day losing streak with an intraday low of $1,720.87.
- US President’s step back from using further military powers to tame the riots fuelled the risk-on sentiment off-late.
- Cautious optimism surrounding the coronavirus vaccine, hopes of economic restart also weigh the bullion.
- US data, headlines concerning the protests, virus and US-China relations will be important to watch.
Gold prices drop to $1,725.96, down 0.12% on a day, amid the Asian session on Wednesday. Recent market optimism seems to have weighed on the precious metal as headlines from the US start flashing positive signals.
Among them, the Axios’ news suggesting US President Donald Trump’s step back from the threat of using more military power to tame the protests seem to have gained major attention.
Also, cautious optimism by the key US medical professional, coupled with the economic restart in Europe, might have pleased the risk-takers as well.
With that in the backdrop, the US 10-year Treasury yields gain 1.8 basis points (bps) to 0.697% whereas stocks in Japan, Australia and China also flash gains during the initial hour of trading.
Even so, the broad weakness of the US dollar and uncertainty surrounding the pandemic’s global economic impact restrict the bullion’s downside.
Additionally, the presence of the US ISM Non-Manufacturing PMI, Factory Orders and ADP Employment Change data on the calendar also pushes the gold traders to be cautious.
Technical analysis
A sustained break below 21-day EMA level of $1,720 becomes necessary for the bears to revisit a six-week-old support line near $1,700. Until then, fears of the quote’s another attempt to challenge the May month high of $1,765.40 can’t be ruled out.
