“¢ Improving risk-appetite continue to dent the commodity’s safe-haven demand.
“¢ Resurgent USD demand/firming Fed rate hike prospects add to the selling pressure.
“¢ Technical selling further contributes towards accelerating the ongoing downfall.
Gold kept losing ground through the early North-American session and dropped to near three-week lows, around $1212 level, in the last hour.
The precious metal extended last week’s retracement slide from over three-month tops, with a combination of negative forces exerting downward pressure for the third consecutive session.
A continuous improvement in global risk appetite, as depicted by a positive tone around equity markets, was initially seen denting the precious metal’s safe-haven demand. This coupled with resurgent US Dollar demand, following the release of better-than-expected private sector employment details – ADP report, further aggravated the selling pressure over the past couple of hours.
Today’s upbeat ADP report also seems to have fueled expectations for a gradual monetary policy tightening beyond 2018 and the same was evident from a sudden pickup in the US Treasury bond yields, which further collaborated towards driving flows away from the non-yielding yellow metal.
Meanwhile, technical selling below 100-day SMA support near the $1220 region could also be one of the factors behind the commodity’s latest leg of sharp fall to the lowest level since Oct. 11.
Technical levels to watch
A follow-through selling below the $1211-10 region has the potential to continue dragging the metal further towards $1206 support area en-route the key $1200 psychological mark. On the flip side, the $1220 region (100-DMA) now becomes immediate hurdle and is followed by resistance near the $1226 level, above which the commodity is likely to aim towards testing $1232-34 supply zone.
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