Gold Price Analysis: XAU/USD plummets below $1,950, down nearly 4% daily
- Gold falls for the third straight day on Wednesday.
- Global equity markets surge higher on coronavirus vaccine hopes.
- Wall Street's main indexes look to open higher.
The troy ounce of the precious continued to lose value for the third straight day on Tuesday and the XAU/USD pair slumped to its lowest level in 11 days at $1,943.76. As of writing, the pair was down 4% on the day at $1,946.
Coronavirus vaccine hopes trigger a risk rally on Tuesday
Earlier in the day, Russian President Vladimir Putin announced that they have developed an effective coronavirus vaccine and added that voluntary vaccinations could start as early as October. Although some experts remain sceptical amid a lack of data on phase 3 trials, this development provided a boost to risk sentiment on Tuesday and weighed on the safe-haven gold.
Meanwhile, White House adviser Kellyanne Conway noted that US President Trump will hold a press conference on Tuesday to deliver an update on six coronavirus vaccines.
Reflecting the upbeat market mood, major European equity indexes are up between 2% and 2.6% and Wall Street's main indexes remain on track to open higher with the S&P 500 futures gaining more than 0.5%.
On the other hand, the greenback is also struggling to find demand in the risk-on environment but doesn't seem to be helping XAU/USD limit its losses. At the moment, the US Dollar Index is down 0.25% on the day at 93.40. There won't be any significant macroeconomic data releases from the US in the remainder of the day and the risk perception is likely to remain as the primary market driver.
Technical levels to watch for