Gold erases majority of early losses, trades above $1,700
- European stocks continue to push higher on Tuesday.
- US Dollar Index extends slide toward 99.50 area.
- Coming up: Goods Trade Balance, CB Consumer Confidence data from US.
With risk-on flows continuing to dominate the financial markets for the second straight day on Tuesday, the precious metal struggled to find demand and dropped to its lowest level in a week at $1,692. However, the broad-based selling pressure surrounding the greenback helped the XAU/USD pair stage a rebound ahead of the American session. As of writing, the pair was down posting small daily losses at 1,710.
Heightened hopes of major European economies starting to move towards normalization amid some encouraging coronavirus numbers help global stock indexes register decisive gains on Tuesday. At the moment, the Euro Stoxx 50 is up 1.75% on the day while Germany's DAX is rising 1.6%. Moreover, the US stock index futures are up more than 1%.
Eyes on US data
In the second half of the day, the Conference Board's (CB) Consumer Confidence Index and Goods Trade Balance data will be featured in the US economic docket. Ahead of these data, the US Dollar Index is down 0.5% on the day at 99.55 to reflect the USD weakness, which allows the pair to pull away from its lows.
Commenting on the importance of the CB's data, “With so much riding on the willingness of Americans to resume their normal lives, the attitudes of everyday citizens are as important, if not more so, than the most astute economic predictions," said FXStreet Analyst Joesph Trevisani. "Indeed, the markets are almost completely beholden to the US consumer.”
Technical levels to watch for