Gold lacks upside momentum while taking rounds to $1779-80 amid the initial Asian session on Wednesday. The bright metal dropped the most since March 31 the previous day, before bouncing off $1,770.90. As no major risk-positive news crossed wires of late, the corrective pullback seems to wait for a fresh push to stay on the table.
Following the escalation in the coronavirus (COVID-19) woes in Asia, the upbeat vaccine developments and hopes of easing the pandemic in some parts of India tested gold sellers. However, comments favoring the rate hike from US Treasury Secretary Yellen roiled market sentiment before the key US diplomat took a U-turn on her initial statements.
While the risk-off mood put a bid under the US dollar, Wall Street bears cheered technology shares’ heavy selling even as Dow Jones Industrial Average (DJI30) managed to bounce in the last hours.
In addition to hints concerning the monetary policy normalization and COVID-19, gold traders were also baffled by downbeat US data that backed the risk-aversion and the USD.
It should, however, be noted that ongoing holidays in Japan and China restrict the market moves ahead of the key US activity and employment numbers.
Among them, today’s US ISM Services PMI will be the first to entertain momentum traders after the ISM Manufacturing PMI disappointed markets.
If the risk catalysts keep flashing mixed signals, gold may choose to remain volatile within the immediate trading range below $1,800.
Despite Tuesday’s sell-off, gold prices stay above $1,766-69 support confluence comprising 50-day and 21-day EMA, as well as a three-week-old ascending trend line, which in turn keeps the buyers hopeful.