- XAU bears look to extend the break below 1730 threshold.
- USD recovers post-Fed losses as risk-aversion refuels haven demand.
- Eyes on global equities, USD dynamics ahead of US data.
Gold (XAU/USD) has breached the 1730 level ahead of the European session, as the bears fight back control amid resurgent US dollar demand across the board.
The yellow metal pauses its three-day relief rally and extends correction from weekly highs of 1739.96 reached in early Asia, as risk-off market mood intensifies and reinforces the haven demand for the US dollar across its main peers. Having said that, the US dollar index stages a solid comeback from post-Fed decision lows of 95.75 to now print daily tops near 96.30, up 0.36% on the day.
The souring sentiment on the global equities is mainly due to the grim US economic outlook predicted by the US Fed Chair J. Powell after the central bank pledged to continue bond-buying to support the economy.
Despite the downtick in the spot, the looming US-China and Australia-China concerns could continue to offer some support to the buyers at lower levels. However, the precious metal is likely to remain at the mercy of the dollar price action and could risk further correction, should the risk tone worsen further heading into the US macro releases, including the key US Continuing Jobless Claims data.
Gold: Technical levels to watch
With the renewed weakness, immediate support is seen at 1716.69 (Friday’s high). A break below which 1700 could be put at risk. Alternatively, the resistances are aligned at 1739.96 (weekly high) and 1745.12 (June 2 high).
Gold: Additional levels
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