“¢ Resurgent USD demand keeps exerting downward pressure for the third straight session.
“¢ Reviving safe-haven demand/sliding US bond yields do little to ease the bearish pressure.
“¢ Short-term oversold conditions might now prompt some short-term covering move.
Gold continued trending lower for the third consecutive session on Wednesday and dropped to a more than six-month low, albeit has managed recover early lost ground.
The US Dollar regained positive traction and built on overnight rebound from two-week lows, which was eventually seen exerting some fresh downward pressure on dollar-denominated commodities – like gold. Adding to this, firming prospects for a gradual Fed rate hike through 2018 was further seen driving flows away from the non-yielding yellow metal.
Even deteriorating risk appetite and reviving demand for traditional safe-haven assets, led by escalating trade tensions between the US and its key allies, did little to lend any support and stall the precious metal’s fall to its lowest level since December 18.
However, near-term oversold conditions could turn out to be only factor prompting traders to lighten their bearish bets and contributing towards a modest rebound/easing the selling pressure, at least for the time being.
Today’s US economic docket, highlighting the release of durable goods orders data, might influence the USD price dynamics and will now be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Any subsequent recovery is likely to confront fresh supply near the $1266 area and is followed by $1270 resistance level. On the flip side, the $1255-53 region now seems to protect the immediate downside, which if broken might continue dragging the commodity further towards $1248-47 intermediate support en-route $1241-40 zone.
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