“¢ A follow-through USD upsurge prompts some fresh selling on Monday.
“¢ Risk-on mood, a renewed uptick in the US bond yields add to the pressure.
Gold came under some renewed selling pressure on Monday and refreshed yearly lows, albeit has managed to recover a bit to currently trade around the $1285 area.
The precious metal finally broke down its three-day-old consolidative range and tumbled to an intraday low level of $1282, marking the lowest since December 27, during the early European session.
A strong follow-through US Dollar upsurge, further boosted by hopes for an easing of trade tensions between the world’s two biggest economies, was seen as one of the key factors prompting some fresh selling around the dollar-denominated commodity.
The US Treasury Secretary Steven Mnuchin’s comments that a trade war between China and the US was “on hold” prompted a global wave of risk-on trade and further weighed on traditional safe-haven assets.
Adding to this, a modest uptick in the US Treasury bond yields further collaborated towards driving flows away from the non-yielding yellow metal and the downfall to its lowest level in nearly five-month lows.
In absence of any major market moving economic releases on Monday, speeches from influential FOMC member, along with this week’s release of the latest FOMC monetary policy meeting minute will be closely scrutinized for some fresh clues over the central bank’s near-term monetary policy outlook and eventually determine the commodity’s next leg of directional move.
Technical levels to watch
Any recovery attempts might now confront immediate resistance near the $1290 level, above which a bout of short-covering could lift the metal back towards $1294-95 supply zone en-route the $1300 handle.
On the flip side, a follow-through selling has the potential to continue dragging the commodity towards $1277-76 intermediate support ahead of the $1270 level and its next major support near the $1265 region.
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