Gold clings to modest daily gains, around $1730 area
- Gold gained some traction and built on the overnight rebound from multi-day lows.
- The Fed’s move to expand the bond-buying program remained supportive of the uptick.
- The upbeat market mood, a goodish picku in the US bond yields capped the upside.
Gold traded with modest gains through the early European session and was last seen hovering near daily tops, around the $1730 region.
The precious metal gained some positive traction on Tuesday and built on the previous day's intraday bounce from multi-day lows that came after the Fed announced to begin buying of investment-grade corporate bonds.
The Fed's move led to some follow-through selling around the US dollar and provided an additional boost to the dollar-denominated commodity, albeit the prevalent upbeat market mood kept a lid on any runaway rally.
The risk-on mood was reinforced by a goodish pickup in the US Treasury bond yields, which further collaborated towards capping gains for the non-yielding yellow metal and warrant some caution for bullish traders.
Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the $1740 horizontal resistance, before traders start positioning for any further near-term appreciating move.
Moving ahead, market participants now look forward to the release of the US monthly retail sales and the Fed Chair Jerome Powell's testimony before the Senate Banking Committee for some meaningful trading opportunities.
Technical levels to watch