“¢ A modest USD retracement helped gain some positive traction.
“¢ Fading safe-haven demand/Fed rate hike expectations cap gains.
Gold struggled to register any meaningful recovery and remains within striking distance of over 17-month lows, set last Friday.
Spot prices edged higher on Tuesday and recovered a part of previous session’s downfall, albeit a combination of diverging forces did little to provide any additional boost and kept a lid on any strong follow-through positive momentum.
A modest US Dollar retracement helped revive demand for the dollar-denominated commodity. The positive factor was largely negated by fading safe-haven demand amid the prevalent positive trading sentiment around equity markets.
This coupled with firming expectations for gradual Fed rate hike path, reinforced by a goodish pickup in the US Treasury bond yields, further collaborated towards capping gains for the non-yielding yellow metal.
Looking at the broader picture, the commodity has been oscillating within a broader trading range over the past four trading sessions. Hence, it would be prudent to wait for a sustained break in either direction before traders start positioning for the near-term trajectory.
Technical Analysis
From a technical perspective, the commodity has been facing difficulty in moving back above 100-hour SMA and the inability to register a notable recovery clearly seems to suggest that the near-term selling bias might still be far from over.
Hence, immediate up-move is likely to face stiff resistance near the $1222-23 region and any subsequent recovery attempts might get sold into near the $1231-33 supply zone.
On the flip side, a decisive break below the $1206-05 region would mark a fresh bearish breakdown and accelerate the fall towards the $1200 psychological round figure mark before the commodity eventually drops to March 2017 low, around the $1194-93 region.
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