Gold drops below $1500, approaches 2020 lows set on Monday
- US Dollar Index gains more than 2% on Wednesday.
- Troy ounce of gold lost more than $80 since Monday.
- Concerns over USD funding shortage continue to dominate financial markets.
The XAU/USD pair failed to build on Tuesday's recovery gains and suffered heavy losses on Wednesday. After touching a daily low of $1,473 earlier in the session, the pair recovered modestly and was last seen trading near $1,485, down nearly 3% on the day. Since the start of the week, the troy ounce of the precious metal lost more than $80 after erasing $165 in the previous week. On Monday, the pair touched the lowest level of 2020 at $1,451.
Broad-based USD strength dominates markets
The broad-based USD strength amid heightened worries over USD funding shortage despite the Federal Reserve's measures to inject liquidity into the markets remains as the main theme.
The US Dollar Index, which tracks the USD's performance against a basket of six major currencies, rose to its highest level since March 2017 at 101.74 to reflect the unabated buying pressure. At the moment, the index seems to have steadied near 101.50, adding 2% on a daily basis.
Meanwhile, Wall Street's main indexes are down between 8% and 10% on Wednesday but the precious metal seems to be having a difficult time finding demand as a safe-haven. On the other hand, the 10-year US Treasury bond yield is staging a decisive rebound and is up 9% on the day.
Technical levels to watch for