Home Gold plummets to fresh YTD lows, remains vulnerable to slide further
FXStreet News

Gold plummets to fresh YTD lows, remains vulnerable to slide further

   “¢   Wednesday’s not so dovish FOMC statement continues to weigh on the commodity.
   “¢   US-China trade optimism dents safe-haven demand and adds to the bearish pressure.
   “¢   A subdued USD price action does little to lend any support or stall the ongoing slide.

Gold finally broke down of its mid-European session trading range and tumbled further below $1270 level to refresh YTD lows in the last hour.

The precious metal extended overnight sharp intraday pullback from the $1287-88 supply zone and remained under some intense selling pressure for the second consecutive session on Thursday. This comes after the FOMC statement showed a more upbeat assessment of the economic developments and dampened prospects for any rate cut this year, which was seen driving flows away from the non-yielding yellow metal.

This coupled with growing optimism over US-China trade negotiations, further fueled by reports that the world’s two largest economies may announce a trade deal by next Friday, further weighed on the precious metal’s safe-haven status. Meanwhile, a modest US Dollar uptick over the past hour or so further aggravated the pressure on the dollar-denominated commodity and collaborated to the ongoing bearish slide.

Today’s sharp intraday decline could further be attributed to some follow-through technical selling, especially after the post-FOMC slide below the $1278-77 horizontal support and a subsequent break through the $1270 level. Hence, a follow-through weakness, amid some repositioning trade ahead of Friday’s release of the closely watched US monthly jobs report (NFP), now looks a distinct possibility.

Technical levels to watch

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.