Gold eases below $1770 level, downside seems limited
- Gold witnessed a modest intraday pullback amid a recovery in the US equity futures.
- A pickup in the US bond yields further exerted pressure on the non-yielding metal.
- Weaker USD might extend some support to the dollar-denominated commodity.
- The set-up still supports prospects for a move towards the ambitious $1800 target.
Gold struggled to capitalize on its early uptick back closer to multi-year tops and was last seen trading near daily lows, just below the $1770 region.
The ever-increasing number of new cases globally served as a warning that the fight against COVID-19 is not over and indicated that the road to recovery will be much slower than expected. Fading hopes of a sharp V-shaped global economic recovery continued weighing on investors' sentiment and benefitted the safe-haven precious metal.
This coupled with the emergence of some fresh US dollar selling further underpinned the dollar-denominated commodity and contributed to the early uptick on the first day of a new trading week. However, a modest rebound in the US equity futures kept a lid on any strong positive move for the metal, at least for the time being.
This coupled with a goodish intraday pickup in the US Treasury bond yields further collaborated towards capping gains, rather exerted some pressure on the non-yielding yellow metal. Despite a modest pullback, the commodity remains well within last week's broader trading range and the striking distance of multi-year tops set last Wednesday.
The range-bounce price action witnessed over the past one-week or so might still be categorized as consolidative. This, in turn, supports prospects for an extension of the near-term appreciating move towards the ambitious $1800/ounce target.
Technical levels to watch