“¢ Resurgent USD demand prompts some fresh selling on Tuesday.
“¢ Sliding US bond yields/risk-off mood helps limit further downside.
“¢ This week’s NFP report eyed for some fresh directional impetus.
After an initial uptick to levels beyond the $1300 handle, Gold met with some fresh supply and turned lower for the third consecutive session.
A fresh wave of US Dollar buying emerged since the last Asian session on Tuesday and was seen as a key factor exerting downward pressure on dollar-denominated commodities – like Gold.
However, global risk-aversion trade, led by political turmoil in Italy and reinforced by a sell-off in the European equity markets, underpinned the precious metal’s safe-haven demand.
This coupled with the ongoing slump in the US Treasury bond yields extended some additional support and helped limit further downside for the non-yielding yellow metal, at least for the time being.
Looking at the broader picture, last week’s rejection from the very important 200-day SMA hurdle and inability to move back above the $1300 handle clearly suggests that the near-term bearish pressure might still far from being over.
However, traders are likely to wait for this week’s important release of the keenly watched non-farm payrolls data for some fresh directional impetus.
Technical levels to watch
Immediate support is pegged near the $1293-92 region, below which the commodity is likely to accelerate the fall towards $1287-85 horizontal support en-route $1282 level (may swing low). On the upside, any meaningful up-move beyond the $1300 handle is likely to confront resistance near $1304 horizontal zone and is closely followed by $1307-08 region (200-DMA).
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