- Gold remained under some heavy selling pressure through the early North American session.
- The intraday downfall seemed rather unaffected by the prevalent risk-off mood, weaker USD.
- Technical selling below the $1720 support seemed to have aggravated the bearish pressure.
Gold continued losing ground through the early North American session and dropped to near one-week lows, around the $1705 region in the last hour.
The precious metal came under some renewed selling pressure on the first day of a new trading week and eroded a part of last week’s goodish positive move. The downtick seemed largely unaffected by the downbeat market mood and the emergence of some fresh US dollar selling.
Concern over a resurgence of coronavirus cases and the possibility of renewed lockdowns to curb the spread dampened prospects for a sharp V-shaped economic recovery. This, in turn, took its toll on the global risk sentiment, albeit failed to benefit the safe-haven commodity.
Meanwhile, the risk-off flows led to some follow-through downfall in the US Treasury bond yields and undermined demand for the US dollar. Bulls, however, seemed rather unimpressed by the combination of factors and refrained from buying the non-yielding yellow metal.
The greenback remained on the defensive following the release of better-than-expected Empire State Manufacturing Index. In fact, the gauge improved sharply to -0.2 for June from -48.5 previous and did little to provide any respite to the dollar-denominated commodity.
Sustained weakness below the $1720 pivotal support added credence to last week’s repeated failure near the $1745 supply zone. Hence, the possibilities of some follow-through technical selling could also be cited as one of the factors behind the commodity’s intraday downfall.
Bears might now be eyeing to challenge the key $1700 mark, which if broken decisively might turn the commodity vulnerable to accelerate the slide further towards the $1685 zone. The downward trajectory could further get extended towards the $1670 support area.
Technical levels to watch
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