“¢ A modest pull-back in equity markets underpins the commodity’s safe-haven demand.
“¢ The prevalent USD bullish sentiment keeps a lid on any meaningful recovery move.
“¢ Traders now eye US ADP report for some fresh impetus later during the NA session.
Gold struggled for a firm direction on Wednesday and was seen trading in the neutral zone, around the $1288 region during the early European session.
A modest pull-back in equity markets revived demand for traditional safe-haven assets and assisted the precious metal to build on the overnight late rebound from over one-month lows. The uptick, however, lacked any strong bullish conviction and quickly ran out of steam near the $1290 area amid follow-through US Dollar strength to near two-week tops.
Against the backdrop of the recent rally in the US Treasury bond yields, the greenback got an additional boost from Tuesday’s supportive US economic releases – ISM non-manufacturing PMI and new home sales data, which eventually turned out to be one of the key factors keeping a lid on any meaningful up-move for the non-yielding yellow metal.
Hence, it would be prudent to wait for a sustained recovery back above the key $1300 psychological mark before confirming that the commodity might have already bottomed out in the near-term and positioning for the resumption of the prior bullish trend.
On the economic data front, today’s release of the US private sector employment details – ADP report, might influence the USD price dynamics and trigger some meaningful trading opportunities around the dollar-denominated commodity.
Technical levels to watch
Immediate resistance is pegged near the $1294-96 region, above which the recovery could get extended beyond the $1300 handle towards its next hurdle near the $1305 level. On the flip side, the $1282-81 area now seems to have emerged as immediate support, which if broken might turn the commodity vulnerable to accelerate the slid further towards $1270 intermediate support en-route 100-day SMA, around the $1265 region.
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