“¢ A goodish pickup in the USD demand prompts some fresh selling on Tuesday.
“¢ Fading safe-haven demand/positive US bond yields adds to the downward pressure.
“¢ Technical studies suggest a follow-through weakness amid thin economic calendar.
Gold extended overnight retracement slide from near two-week tops and maintained its offered tone through the mid-European session.
Resurgent US Dollar demand, with the bulls looking to break the recent bearish momentum, was seen as one of the key factors prompting some fresh selling around dollar-denominated commodities – like gold.
This coupled with improving investors’ appetite for riskier assets, as depicted by a positive trading sentiment around European equity markets, further weighed on the precious metal’s safe-haven appeal and collaborated to the downfall.
With today’s slide, the yellow metal has reversed all of its modest gains recorded since last Wednesday and the fact that it has weakened back below 100-hour SMA, for the first time in about a week, now seems to suggest that the recent corrective bounce might have already run out of steam.
Meanwhile, a goodish pick up in the US Treasury bond yields might further collaborate towards driving flows away from the non-yielding yellow metal. Hence, a follow-through selling, absent market moving economic releases, now looks a distinct possibility.
Technical levels to watch
Immediate support is pegged near the $1248-47 region, below which the commodity is likely to head back towards challenging the $1242-41 region. On the flip side, $1257 level now becomes an immediate strong hurdle, which if cleared could assist the metal to aim back towards retesting the $1265-66 supply zone.
Share
