“¢ A goodish pickup in the USD demand prompts some fresh selling on Tuesday.
“¢ Bears seemed unaffected by the prevalent cautious mood/weaker bond yields.
“¢ Technical selling below $1270 now opens the room for further intraday slide.
Gold finally broke down of its three-day-old consolidative trading range and tumbled to near four-month lows, farther below $1270 level in the last hour.
The precious metal added to last week’s sharp fall of around 1.5% and the latest leg of a downfall comes amid a goodish pickup in the US Dollar demand. The incoming US economic data, including a jump in monthly retail figures, extended some support to the greenback and eventually drove flows away from the dollar-denominated commodity.
The bearish trend seemed rather unaffected by an escalation in the US-Iran tensions, wherein the US plans to halt waivers for countries that import Iranian oil and the prevalent cautions mood in equity markets, which tends to benefit the precious metal relative safe-haven status.
Even a modest pullback in the US Treasury bond yields also did little to lend any support to the non-yielding yellow metal or stall the ongoing slide to the lower level since late-December, or fresh YTD lows. Hence, a follow-through weakness, led by some fresh technical selling amid absent relevant market moving US economic releases, now looks a distinct possibility.
Technical levels to watch
Any subsequent slide below the $1264 level now seems to find some support near the $1260 region, which if broken might accelerate the fall further towards $1255-54 intermediate support en-route the $1250 zone. On the flip side, any attempted bounce might now confront immediate resistance near the $1271-72 area, above which a bout of short-covering could lift the commodity further towards $1279-80 supply zone.
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