The USD index rallied to fresh monthly highs around 93.60
Gold prices failed to overcome the $1,760 intermediate resistance at the beginning of the week to finish unchanged yesterday. On Tuesday, the bullion came under renewed selling pressure to dip towards $1,735 for the first time since August 11. Following the initial decline, the precious metal managed to trim intraday losses to the $1,742 area but still was on the defensive during the European hours.
The bullion struggles to regain upside momentum amid a stronger dollar. The USD index rallied to fresh monthly highs around 93.60, keeping its march north unchanged for the third session in a row on Tuesday. If the upside pressure persists in the short term, the index would climb to 2021 highs in the 93.70/75 area seen on August 20.
Yields of the US 10-year note rose to three-month peaks above the key 1.50% handle yesterday to settle around this level on Tuesday, adding to a more upbeat tone surrounding the greenback. The currency was also supported by strong economic data. The report showed on Monday that US durable goods orders increased by 1.8% in August from -0.1% previous.
Against this backdrop, gold prices keep struggling below the 20-DMA since mid-September and could see deeper losses in the coming days as USD bulls remain in control amid rising odds of policy tightening by the Federal Reserve in November (or probably even in October).
From the technical point of view, the yellow metal needs to get back above the mentioned moving average (today at $1,780) in order to retarget the $1,800 psychological level. On the downside, a break below $1,735 would pave the way towards the $1,717 region, followed by the $1,700 figure last seen in early-August.