Gold Price Forecast: XAU/USD hangs near multi-week low, bears flirt with $1,800 mark
Gold struggled to preserve its modest intraday recovery gains from a near three-week low. Hawkish Fed expectations, elevated US bond yields, stronger USD contributed to cap gains. COVID-19 jitters could lend support to the safe-haven metal and help limit the downside. Gold gained some positive traction during the first half of the trading action on Tuesday, albeit struggled to capitalize on the move. The XAU/USD has now surrendered a major part of its intraday gains and was last seen trading just above the $1,800 mark, around the lowest level in nearly three weeks touched in the previous day.
The recent US dollar rally got a strong boost on Monday after US President nominated Jerome Powell to serve as the Fed chairman for a second term. The fact that investors considered the other leading candidate, Lael Brainard, to be the more dovish of the two, the announcement reinforced bets for higher US interest rates. This, in turn, pushed the USD Index to a 16-month peak and prompted aggressive selling around the dollar-denominated gold.
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