Gold Sideways Trading Continues at $1,793

During Tuesday’s Asian trading session, gold extended its previous three-day declining streak, drawing some further offers below the $1,790 level, as the upbeat market trading environment tends to undermine the safe-haven assets, including gold.

Apart from this, another reason for its losses could also be Friday’s record US Producer Price Index (PPI) data and the comments by Philadelphia Federal Reserve Bank President, Patrick Harker, early this week. This was seen as a critical factor that weighed on any upside moves in gold.

On the contrary, the concerns over hurricane Ida, typhoon Chanthu, and tropical storm Nicholas seem to be keeping the yellow-metal buyers hopeful, amid the the bearish moves in the greenback and the downbeat performance of the US Treasury Yields. It should be noted that the lower US Treasury Yields initially aided gold prices in posting their most significant daily gains since August 2003.However, the cautious mood ahead of the crucial US Consumer Price Index (CPI) data for August is keeping gold in a familiar region. Similarly, China’s recent aggressive behavior against global leaders, and hopes on the vaccine front in the Asia-Pacific region, are helping to limit further losses in the gold prices. The yellow metal is currently trading at 1,790.63, and consolidating between 1,789.80 and 1,793.72.

Receding Geopolitical Fears, Easing Virus Fears & Vaccine-related Hopes

Despite the anxiety among market traders, ahead of the crucial US Consumer Price Index (CPI) data, the market trading sentiment maintained its positive overnight moves early on Tuesday, remaining well bid ahead of the European session, as the global push for faster administering of vaccinations helped the market stay bid.

In the meantime, Iran’s willingness to surrender investigation rights at the nuclear facility has had some additional positive impact on the market trading sentiment. The US 10-year Treasury Yields rose by 1.7 basis points (bps), to recover 1.34%, reversing the previous day’s losses.

Similarly, the S&P 500 Futures were green, and up by 0.17% intraday, at around 4,76 by press time. The upbeat tone in global equity markets at the time weakened the safe-haven gold prices.

Weakness in US Dollar Supporting Gold

On the USD front, the broad-based US dollar failed to recover its losses of the previous day, remaining subdued as investors refocused on the coming US inflation data, which is due later in the day.

Analysts expect these readouts to show that the headline consumer price index (CPI) dipped slightly to 5.3% in August. They also see the core CPI coming in at around 4.2%, above the Fed’s target of 2.0%. Thus, the cautious sentiment ahead of the critical US data kept the American currency under pressure.

In addition to this, the upbeat market mood also put some downside pressure on the safe-haven US dollar. The declines in the greenback are helping to limit deeper losses in the precious metal, as the price of gold is inversely related to the price of the US dollar.

Coronavirus (COVID-19) & Downbeat Economic Data: