Gold drops to 13-month lows, nearing $1200 mark ahead of NFP

   “¢   Fails to capitalize on an early uptick, led by a subdued USD demand.
   “¢   Fed rate hike prospects kept a lid on any meaningful rebound.  
   “¢   Positive European equities further dent safe-haven demand.  

Gold reversed an early uptick to $1210 area and dropped to near 13-month lows in the last hour.  

The US Dollar received a strong boost on Thursday and was seen as one of the key factors prompting some heavily selling around the dollar-denominated commodity.  

Adding to this, the August Fed monetary policy statement reaffirmed the gradual rate hike path and exerted some additional downward pressure on the non-yielding yellow metal.  

A subdued USD price action provided a minor lift during the Asian session on Friday, albeit signs of stability in global financial markets did little to revive the safe-haven demand and kept a lid on any meaningful recovery.  

The precious metal touched an intraday low level of $1205, the lowest since July 2017, but the selling pressure now seems to have abated a bit as investors now seemed to have turned cautious ahead of the keenly watched US monthly jobs report.  

Today’s macro data will be looked upon to reaffirm expectations for a gradual pace of the Fed monetary policy tightening, which might eventually pave the way for an extension of the commodity’s ongoing bearish trajectory.

Technical levels to watch

The $1200 handle is likely to act as an immediate support, which if broken is likely to accelerate the fall towards $1296 support area before the commodity drops to its next support near $1290 level.

On the flip side, $1210 area now seems to have emerged as an immediate hurdle, above which a bout of short-covering could lift the commodity towards $1216 intermediate hurdle en-route $1223-24 supply zone.