During Tuesday’s Asian trading session, the yellow metal gold failed to extend its previous day’s positive performance. It turned sour around below the $1,780 level mainly due to the upbeat market sentiment triggered by the optimism over the faster Covid vaccinations. Therefore, the positive risk tone was seen as one of the key factors that weighed on the safe-haven yellow metal. Apart from this, the prevalent bullish sentiment surrounding the U.S. dollar has also played a significant role in undermining bullion prices. The reason for the weaker GOLD prices could also be attributed to the reports suggesting that the demand for U.S.-made capital goods increased in March, and shipments grew, which shows the sign of economic growth.

Alternatively, the renewed worries over the US-China relationship, Uncertainty over U.S. infrastructure spending, and mounting Covid woes in India and Japan probe the risk-on mood, which helps the bullion prices to limit its deeper losses, at least for now. As of writing, the yellow metal price is trading at 1,780.68 and consolidating in the range between 1,773.80 and 1,783.99. Investors still await the U.S. Federal Reserve policy decision due to be handed down later in the week.

Despite the mounting coronavirus (COVID-19) woes, the market trading sentiment has been representing positive performance on the day as the bullish appearance of Asia-Pacific stocks and gains in the S&P 500 Futures tend to highlight the risk-on mood. It was supported by optimism over faster vaccinations for the deadly coronavirus as the U.S. authorities recently approved the restart of the Johnson & Johnson vaccine after a ten-day ban of the key Covid vaccine’s usage. In addition, the U.S., U.K., Russia, and Saudi Arabia are up to send necessary medical help to India in the wake of the worsening situation in New Delhi, which also boosts the market trading mood. These positive activities put a bid under the U.S. stocks, lifting major indices higher, which was seen as one of the key factors undermining the safe-haven gold prices.

Despite the risk-on mood, the broad-based U.S. dollar managed to stop its previous-day negative performance and drew some fresh bids on the day as investors still await the U.S. Federal Reserve’s latest policy decision, which is due to be handed down on April 29. Market investors are keeping their eyes mainly on Fed Chairman Jerome Powell’s outlook on the economy. Still, no major surprises are expected in the central bank’s decision. Therefore, the gains in the U.S. dollar were seen as one of the key factors that kept the gold prices under pressure as they are inversely related to the price of the U.S. dollar. The U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose by 0.14% to 90.907 by 12:39 AM ET (4:39 AM GMT).

Alternatively, the worsening coronavirus condition in India and Japan probes the market risk-on mood, which was seen as one of the key factors that helps gold prices to limit their deeper losses. Apart from this, the renewed worries over the US-China relationship and Uncertainty over U.S. infrastructure spending keep challenging the market’s upbeat mood, which may boost the safe-haven prices. Given the pre-Fed mood and a light calendar, the market traders will keep their eyes only on trade/political headlines. In addition to this, the U.S. dollar price movement will continue to play a critical role in gold’s direction.

Gold Daily Support and Resistance

S1 1748.45
S2 1763.18
S3 1772.23
Pivot Point 1777.91
R1 1786.96
R2 1792.64
R3 1807.37

GOLD slipped to trade at 1,780 as it failed to break over 1,799 resistance. On the 4 hour timeframe, the precious metal has formed an upward channel that’s supporting a bullish trend in gold. Its immediate resistance stays at 1,799 and 1,815 levels. At the same time, the support levels hold around 1,774 and 1,766. The closing of Doji and Spinning top candles over 1,774 supports suggests odds of a bullish trend today. Let’s keep an eye on the 1,775 level. Good luck!