Gold added to the previous session's losses and dropped to near one-week lows during the early Asian session on Tuesday, albeit managed to recover a bit thereafter.
The precious metal failed to capitalize on last week's solid rebound from two-month lows and came under some renewed selling pressure on the first day of a new trading week. A goodish pickup in the US Treasury bond yields provided a modest lift to the US Dollar, which eventually turned out to be one of the key factors exerting pressure on the dollar-denominated commodity - Gold.
Weighed down by trade optimism
The downtick seemed unaffected by a mixed trading sentiment across global equity markets, weighed down by reports that Chinese officials were increasingly reluctant to agree to a broad trade deal pursued by the US President Donald Trump. White House economic adviser Larry Kudlow helped ease some anxiety, which further undermined the precious metal's safe-haven demand and collaborated to the weaker tone.
Kudlow said that the United States was open to looking at China's proposals and added that the US and Chinese trade negotiators could make progress. This was followed by reports suggesting that China is ready to do a deal with the United States on parts of negotiations. Hence, the key focus will remain on the outcome from US-China trade negotiations in Washington starting this Thursday.
In the meantime, Tuesday's US economic docket, highlighting the release of Producer Price Index (PPI), will now be looked upon for some short-term impetus later during the early North-American session. This coupled with the broader market risk sentiment and the USD price dynamics might further assist investors to grab some meaningful trading opportunities.