Gold refreshes session low and rebounds, weighed down by stronger USD
• Strong USD recovery prompts fresh selling.
• Risk-on mood adds to the downward pressure.
• Subdued US bond yields help limit immediate downside.
Gold faded a bullish spike to $1296 and quickly changed course to refresh session lows during the early NA session.
A fresh wave of greenback buying interest, with the key US Dollar Index moving back above the 93.00 handle seems to be only factor prompting fresh selling around dollar-denominated commodities - like gold.
Adding to this, a strong opening in the US equity markets, with all the three major indices hitting fresh record highs immediately after the opening bell, further dented the precious metal's safe-haven appeal and collaborated to sharp retracement slide over the past hour.
The downside, however, seemed cushioned by subdued action around the US Treasury bond yields, which was seen lending some support to the non-yielding yellow metal.
Meanwhile, the market had a rather muted reaction to the Fed Chair Designate Jerome Powell's testimony before the Senate Committee, with broader market risk sentiment and the USD price dynamics affecting the commodity's movement on Tuesday.
Technical levels to watch
A follow-through weakness below $1290 level could get extended back towards 100-day SMA support near the $1284 region. On the flip side, the $1297-99 region might continue to cap immediate upside, above which a fresh bout of short-covering could lift the metal towards $1306 level en-route the $1310-12 supply zone.