Gold fails to hold above $1400 continues to retrace June rally
- US Dollar Index pushes higher for fifth straight day.
- 10-year US Treasury bond yield extends rebound on Tuesday.
- US stocks start the day under pressure on lower probability of multiple Fed rate cuts.
The troy ounce of the precious metal rose above the critical $1400 mark on Monday but failed to hold there amid broad USD strength. On Tuesday, the XAU/USD pair is fluctuating in a relatively tight range and was last seen posting small daily losses at $1393.40.
The greenback rally that was fueled by the strong labour market data from the U.S. last Friday remains intact on Tuesday with the US Dollar Index advancing to its highest level since mid-June at 97.60 and keeping the bearish pressure on the pair intact. Moreover, the 10-year US Treasury bond yield is rising for the third day, allowing the dollar to preserve its strength.
Meanwhile, major equity indexes in the U.S. started the day in the negative territory as receding hopes of the Fed making a dovish shift and multiple rate cuts this year seems to be weighing on the sentiment and keeping investors away from stocks. The sour market sentiment is helping the precious metal limit its losses for the time being.
As expected, FOMC Chairman Powell today didn't comment on the policy outlook in his prepared remarks earlier today and markets are now waiting for the Atlanta Fed President Bostic and St. Louis Fed President Bullard's speeches.
Technical levels to consider