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Gold traded with a mild negative bid through the early European session and dropped to multi-day lows in the last hour, albeit has still managed to hold above the $1 600 mark.
The precious metal extended its sideways consolidative price action yesterday and remained confined well within a broader trading range held over the past five trading sessions or so as investors awaited a fresh catalyst before positioning for the next leg of a directional move.
Against the backdrop of the Fed’s unlimited QE and a massive $2,2 trillion US economic stimulus package, investors’ sentiment got an additional boost from a sharp rebound in the Chinese manufacturing sector activity boosted investors’ confidence yesterday.
This was evident from a further recovery in the global risk sentiment and reinforced by a goodish pickup in the US Treasury bond yields.
This eventually dampened demand for traditional safe-haven assets and exerted some pressure on the non-yielding yellow metal.
— Bloomberg.
Peter Tanyanyiwa
Online Reporter