Spot gold is trading lower for a third day in a row on Tuesday, with recovery attempts failed amid the reemergence of dollar demand. The greenback makes a comeback due to another rise in the US Treasury yields above the key 3,00% mark. The yellow metal was rejected at the 100-DMA on Friday and resumed the downside move, probing the $1,310 level once again.
Despite the dollar’s bullish impetus looks limited and unsustainable, gold keeps bleeding and remains vulnerable to further losses as the overall demand for the precious metal as a safe haven asset is quite muted. In the short term, gold may get an opportunity to recover or cut its intraday losses, should the buck resume the downside correction. This will depend on the incoming US retail sales data.
In the bigger picture, the metal still needs to recover its ground above the 100-DMA which caps the upside. For this, a more sustainable dollar decline is necessary. On the downside, the $1,300 remains the key psychological support. At this stage, there is a low chance of a probing this level.
By Helen Rush
Senior Analyst at Capital Markets