Gold remains depressed near session lows, around $1950 post-US GDP

• A modest USD rebound from two-year lows prompted some profit-taking around gold.
• The US GDP collapsed 32.9% during the second quarter of 2020, albeit did little to influence.
• A steep fall in the US bond yields, weaker risk sentiment extended some support to the metal.

Gold maintained its offered tone near daily lows, around the $1950 region, and had a rather muted reaction to the US GDP report.

The precious metal witnessed some selling on Thursday and moved away from the previous day's all-time high, around the $1981 area retested in the aftermath of a dovish FOMC statement. A modest US dollar rebound from more than two-year lows was seen as one of the key factors that prompted some profit-taking around the dollar-denominated commodity.

Meanwhile, the USD bulls seemed rather unimpressed by Thursday's release of the advance Q2 GDP report, which showed that the US economy contracted by 32.9% annualize pace. A steep decline in the US Treasury bond yields, coupled with the impasse over the next round of the US fiscal stimulus measures kept a lid on any strong gains for the greenback. This, in turn, extended some support to the non-yielding yellow metal.

Apart from this, a sharp turnaround in the global risk sentiment – as depicted by heavy losses in the equity markets – further underpinned the precious metal's safe-haven status and helped limit any deeper losses, at least for now. Hence, it will be prudent to wait for some strong follow-through selling before confirming that the commodity might have already topped out.

Technical levels to watch