Gold holds steady above $1700 mark, lacks follow-through amid upbeat market mood
- Some aggressive USD selling helped revive demand for the dollar-denominated commodity.
- A strong rally in the global equity markets kept a lid on any runaway rally for the metal.
- The set-up warrants some caution before positioning for any further appreciating move.
Gold struggled to capitalize on its goodish intraday bounce from four-day lows and was last seen trading in the neutral territory, around the $1710 region.
The US dollar failed to sustain its early positive move, instead met with some aggressive supply and turned out to be one of the key factors that helped revive demand for the dollar-denominated commodity.
This coupled with a mildly weaker tone surrounding the US Treasury bond yields extended some additional support to the non-yielding yellow metal, albeit a strong rally in the equity markets capped the upside.
The global risk sentiment remained well supported by the latest optimism over the easing of coronavirus-related restrictions globally and a push to accelerate the gradual re-opening of the economies.
The risk-on flow seemed to be the only factor holding investors from placing any aggressive bullish bets and kept a lid on any runaway rally for the safe-haven precious metal, at least for the time being.
Hence, it will be prudent to wait for some strong follow-through buying before traders start positioning for any further near-term appreciating move for the commodity, possibly towards the $1736-38 heavy supply zone.
In the meantime, market participants will look forward to the release of the Conference Board's US Consumer Confidence Index, which might influence the USD price dynamics and provide some trading impetus.
Technical levels to watch