“¢ The latest optimism over Chinese data boosts risk sentiment and dents safe-haven demand.
“¢ A follow-through USD buying interest weighs further, weaker bond yields help limit the downside.
“¢ Traders now eye today’s release of US durable goods orders for some short-term opportunities.
Gold prices remained depressed through the early European session on Tuesday and touched fresh three-week lows, around the $1285 region in the last hour.
The precious metal extended last week’s retracement slide from levels beyond the key $1300 psychological mark and traded with a mild negative bias for the fifth session in the previous six amid fading safe-haven demand, especially after the latest Chinese manufacturing data eased fears of a sharp slowdown in the world’s second-largest economy.
China’s Caixin manufacturing PMI, released on Monday, rose to 50.8 from 49.9 in February and marked the strongest reading in eight months. This followed an uptick in the official PMI, released over the weekend, and provided a strong boost to investors’ appetite for perceived riskier assets – like equities.
Adding to this, some renewed US Dollar buying interest, following yesterday’s stronger than expected US ISM manufacturing PMI print for March, further dented the already weaker sentiment surrounding the dollar-denominated commodity and collaborated to the ongoing slide to the lowest level since March 8.
Meanwhile, bullish traders seemed rather unimpressed by a modest pull-back in the US Treasury bond yields, which tend to benefit the non-yielding yellow metal, albeit seemed to be the only factor lending some support and might help limit deeper losses, at least for the time being.
Moving ahead, today’s US economic docket – highlighting the release of durable goods orders data, will now be looked upon for some short-term trading opportunities later during the early North-American session, though the key focus will be on Friday’s closely watched US monthly jobs report (NFP).
Technical levels to watch
Immediate support is pegged near the $1281-80 region, coinciding with 100-day SMA, below which the commodity is likely to accelerate the fall further towards $1277 level en-route the $1270-68 support area. On the flip side, the $1290-91 region now seems to act as an immediate resistance and any subsequent recovery seems more likely to confront some heavy supply, rather remain capped near the $1300 round figure mark.
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