Gold surrenders early gains, slides back closer to session lows near $1555 level
- Gold edged higher amid concerns about coronavirus but lacked any follow-through.
- The bid tone surrounding the USD seemed to exert some fresh downward pressure.
- Traders now eye US ADP report and ISM Non-Manufacturing PMI for a fresh impetus.
Gold surrendered a major part of its early gains and now seems headed back towards the lower end of its daily trading range.
The safe-haven commodity managed to attract some buying interest during the Asian session on Wednesday amid concerns over the economic impact of the deadly coronavirus. Despite China's efforts to contain the outbreak, the death toll rose to 490 and the number of new cases climbed to 24,324. This eventually weighed on investors' confidence and underpinned demand for traditional safe-haven assets.
Stronger USD capping gains
The global flight to safety was further reinforced by a modest pullback in the US Treasury bond yields, which further played their part in providing an additional lift to the non-yielding yellow metal. Despite the supporting factors, bulls failed to capitalize on the attempted positive move. The bid tone surrounding the US dollar was seen as one of the key factors capping gains for the dollar-denominated commodity.
It will now be interesting to see if the precious metal is able to regain some positive traction or continues with its recent sharp pullback from multi-week tops. Market participants now look forward to the US economic docket, highlighting the release of the ADP report and ISM Non-Manufacturing PMI, for some short-term trading opportunities later during the early North-American session on Wednesday.
Technical levels to watch