Gold remains confined in a range, around $1640
- Gold failed to build on the strong positive move led by the Fed’s surprise rate cut.
- Rebounding US bond yields underpinned the USD and kept a lid on any further gains.
- The downside remains limited amid a fresh leg down in the US equity indices futures.
Gold extended its consolidative price action through the early European session on Thursday and remained confined in a range around the $1640 region.
A combination of diverging forces failed to provide any meaningful impetus or assist the commodity to build on this week's positive move, sponsored by the Fed's surprise move on Tuesday to cut interest rates by 50 bps.
Investors await a fresh catalyst
A coordinated effort by major central banks helped ease concerns over the negative impact of the coronavirus outbreak on the global economy and continued boosting investors' appetite for perceived riskier currencies.
The risk-on mood was reinforced by a pickup in the US Treasury bond yields, which allowed the US dollar to preserve the overnight recovery gains and kept a lid on any upside for the dollar-denominated commodity.
Despite the above-mentioned factors, a sharp fall in the US equity indices futures extended some support to the precious metal's safe-haven status and helped limit deeper losses, at least for the time being.
Hence, it will be prudent to wait for a sustained break through a two-day-old trading range before positioning for any firm intraday direction amid absent relevant market-moving economic releases on Thursday.
Technical levels to watch