Gold holds steady near $1724-25 area, Powell’s testimony eyed for fresh impetus
- Gold failed to preserve its early modest gains and refreshed daily lows in the last hour.
- The upbeat market mood, a modest pickup in the USD demand exerted some pressure.
- The downside remains cushioned ahead of the Fed Chair Jerome Powell’s testimony.
Gold dropped to fresh session lows, around the $1717-16 region in the last hour, albeit lacked any strong follow-through and was last seen trading in the neutral territory.
Investors cheered the Fed's announcement on Monday that it will start buying purchasing a diversified range of investment-grade US corporate bonds. The global risk sentiment got an additional boost from reports that the Trump administration was preparing an additional $1 trillion infrastructure spending bill.
The upbeat market mood was seen as one of the key factors that undermined demand for the safe-haven precious metal and kept a lid on the intraday uptick. This coupled with some strong follow-through uptick in the US Treasury bond yields further collaborated towards capping the upside for the non-yielding yellow metal.
Meanwhile, the modest pullback from the daily swing highs, around the $1733 region, was sponsored by a goodish intraday bounce in the US dollar, tends to drive flows away from the dollar-denominated commodity. The USD uptick got an additional boost following the release of stronger-than-anticipated US monthly retail sales data.
The downside, however, remained cushioned, at least for the time being, as investors refrained from placing any aggressive bets ahead of the Fed Chair Jerome Powell's testimony before the Senate Banking Committee. Powell's expectations for the US economy will now play a key role in determining the commodity's near-term trajectory.
Technical levels to watch