“¢ Subdued USD demand/weaker US bond yields extend some support.
“¢ Fading safe-haven demand does little to register any meaningful recovery.
Gold stall its recent decline from levels beyond the $1300 mark and now seems to have stabilized around the $1290 area
After three consecutive days of decline, the precious metal lacked any firm directional bias and seesawed between tepid gains/minor losses. A combination of diverging forces did little to provide any fresh impetus and led to a range-bound price action through the early European session on Tuesday.
Easing geopolitical tensions, after the White House confirmed the US President Donald Trump’s meeting with his North Korean counterpart Kim”¯Jong-un, coupled with improving risk appetite weighed on the precious metal’s safe-haven demand.
The downside, however, remained cushioned amid a subdued US Dollar demand and a mildly softer tone around the US Treasury bond yields, which extended some support to the dollar-denominated/non-yielding yellow metal.
Meanwhile, the recent price action, wherein every attempt recovery has been sold into, clearly seems to suggest that the near-term bearish trajectory might still be far from over. Hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility.
Technical levels to watch
Immediate support is pegged near the $1287-86 region and is followed by YTD lows support near the $1282 level, which if broken could accelerate the fall towards $1275 intermediate support en-route $1270 area.
On the upside, $1296-98 region, closely followed by the $1300 handle might continue to act as an immediate resistance, above which the recovery move could get extended back towards $1307-08 barrier (200-DMA).
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