An improvement in the overall market sentiment and a rally in equity markets has sent gold prices lower early on Wednesday as markets focus on resumption of economic activity in some countries around the world. At the time of writing, GOLD is trading at a little above $1,701.

Gold has also weakened after the US dollar managed to make gains on the back of a lesser than expected contraction in the US services sector during April. The dollar has also strengthened as traders look forward to some US states restarting economic activity in the coming weeks, weakening the yellow metal as a result.

Several Fed officials have expressed guarded confidence that the US economy could start recovering towards the second half of the year, despite the ongoing coronavirus pandemic. Although, they have cautioned that economic recovery could take place at a far slower pace than previously anticipated.

These statements further boosted the market sentiment and sent the safe haven metal appeal of gold lower.