“¢ A goodish pickup in the USD demand prompts some fresh selling on Monday.
“¢ German political woes/ reviving safe-haven demand did little to lend any support.
Gold continued with its struggle to register any meaningful recovery and remained within striking distance of 6-1/2 month lows set last Thursday.
The US Dollar kicked off the third quarter on a strong note and was seen as one of the key factors weighing on dollar-denominated commodities – like gold at the start of a new trading week.
The bearish sentiment remained unabated despite a bout of global risk-aversion trade, as depicted by a sea of red across European equity markets led by the latest German political jitters.
The risk-off mood was evident from the ongoing downfall in the US Treasury bond yields but did little to lend any support to the precious metal’s safe-haven appeal.
Meanwhile, prospects for a gradual Fed rate hike moves through the end of this year, further reinforced by Friday’s core PCE price index, might continue to keep a lid on any meaningful recovery for the non-yielding metal.
Moving ahead, this week’s heavyweight US economic data, including the keenly watched non-farm payrolls data might influence Fed rate hike expectations and eventually help determine the commodity’s next leg of directional move.
With the USD price dynamics turning out to be an exclusive driver of the metal’s momentum on Monday, the release of the US ISM manufacturing PMI will now be looked upon to grab some short-term trading opportunities during the early North-American session.
Technical levels to watch
Immediate support is pegged near the $1246 region, below which the commodity is likely to extend the downfall further towards Dec. 2017 swing lows, around the $1237-36 area. On the flip side, the $1255 region now seems to have emerged as an immediate hurdle, which if cleared might trigger a short-covering bounce towards $1261 level en-route the $1267 supply zone.
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