Breaking: XAU/USD tumbles below $1900 on constructive Russo-Ukraine developments

Spot gold (XAU/USD) prices tumbled beneath the $1900 level on Tuesday in wake of constructive Russo-Ukraine developments, with the precious metal now trading in the $1890 area, its lowest in roughly one month and down over 1.5% on the day. Russo-Ukraine peace talks seemingly made decent progress, while the Russian Defense Ministry announced that it would be scaling down its military operations near key Ukrainian cities in order to foster more constructive negotiating conditions. 

XAU/USD is now probing its 50-Day Moving Average in the $1890 area, having already broken below earlier mid-month lows around $1895. A break below could open the door to a push lower towards the next key support area which would be around $1880 - this level has acted as key support and resistance in recent months.

Positive geopolitical updates arent the only factor weighing on gold. Bond yields globally continue to melt higher, with focus on Eurozone yields on Tuesday as the German 2-year approaches 0.0% for the first time since 2015, but US yields also hitting/nearing multi-year highs. Bond market participants are upping their central bank tightening bets and higher interest rates tend to erode demand for gold by increasing the "opportunity cost" of holding non-yielding assets. The push higher in yields is one key reason why gold prices have reversed lower so sharply this week - XAU/USD is already down more than 3.0% or over $60 on the week.