Gold Price Analysis: XAU/USD trades with modest losses below $1,780, US GDP awaited
- Gold witnessed an intraday turnaround from one-week tops touched earlier this Thursday.
- A strong pickup in the US bond yields revived the USD demand and prompted fresh selling.
- The risk-on mood further contributed to the intraday fall ahead of the Advance US Q1 GDP.
Gold extended its steady descent through the early European session and refreshed daily lows, around the $1,775 area in the last hour.
The precious metal built on the previous day's goodish rebound from one-and-half-week lows and gained some traction during the first half of the trading action on Thursday. The US dollar added to the post-FOMC losses and dropped to over two-month lows. This, in turn, was seen as a key factor that provided a modest lift to the dollar-denominated commodity.
As investors digested the Fed's dovish message, a goodish pickup in the US Treasury bond yields helped ease the USD bearish pressure and prompted some fresh selling around the non-yielding yellow metal. Apart from this, the underlying bullish sentiment in the financial markets further acted as a headwind for the safe-haven XAU/USD and collaborated to the downfall.
Given repeated failures near the $1,800 mark, the emergence of some fresh selling on Thursday suggests that the recent recovery from multi-month lows has run out of steam. Sustained weakness below the $1,765-60 resistance-turned support will reaffirm the negative outlook and turn the XAU/USD vulnerable to slide further to the $1,722 area en- route the $1,700 mark.
Market participants now look forward to the release of the Advance US Q1 GDP report, due later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the XAU/USD. Traders might further take cues from the broader market risk sentiment to grab some short-term opportunities.
Technical levels to watch