“¢ The prevalent risk-on mood continues to dent the commodity’s safe-haven status.
“¢ Positive US bond yields offset subdued USD action and add to the selling bias.
Gold struggled to register any meaningful recovery and remained within striking distance of over one-month lows, set on Friday.
After an initial uptick to the $1300 neighbourhood, the precious metal met with some fresh supply and has now drifted into the negative territory for the fourth consecutive session amid the prevalent risk-on mood on the back of the latest optimism over a possible US-China trade deal.
A report from the Wall Street Journal on Sunday said that the world’s two largest economies could reach a formal agreement at a summit around March 27 and provided a fresh boost to investors’ appetite for riskier assets, which was eventually seen weighing on the commodity’s safe-haven status.
The risk-on mood was evident from a positive mood across global equity markets, which coupled with the recent upsurge in the US Treasury bond yields exerted some additional downward pressure on the non-yielding yellow metal and further collaborated to the weaker tone.
Meanwhile, today’s downtick could further be attributed to some follow-through technical, especially after Friday’s bearish break below the key $1300 psychological mark, though a subdued US Dollar demand, which tends to underpin demand for the dollar-denominated commodity, might help limit downside.
There isn’t any major market-moving economic data due for release on Monday and hence, the broader market risk sentiment, along with the US bonds/USD price dynamics might continue to play a key role in influencing the commodity’s intraday price moves.
Technical levels to watch
Any subsequent slide is likely to find some support near the $1286 horizontal level, below which the corrective slide could further get extended towards challenging the $1280 region en-route $1276 area. On the flip side, the $1300 handle now becomes immediate strong resistance, which if cleared might trigger a short-covering bounce and towards $1315 supply zone.
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