Gold came under some renewed selling pressure on Thursday and eroded majority of yesterday’s tepid recovery gains from 2-week lows.
Currently trading around $1264 level, testing session lows, the precious metal resumed with its prior depreciating despite of a subdued US Dollar price-action. Moreover, the prevalent cautious sentiment surrounding equity markets also did little to lend any support to the yellow metal’s safe-haven appeal.
Meanwhile, a mildly positive tone surrounding the US treasury bond yields seems to be only factor weighing on the non-yielding metal. Adding to this, NAFTA news further eased investors concerns over the US President Donald Trump’s protectionist stance and collaborated to the offered tone surrounding the metal.
It, however, remains to be seen if the commodity is able find some fresh buying interest at lower levels and defend two-week lows support near $1260 level amid fading optimism over Trump’s pro-growth economic politics, especially after disappointment from Wednesday’s tax reforms announcement.
Investors now look forward to the ECB monetary policy decision, which could infuse some volatility in financial markets and derive demand for traditional safe-haven assets.
Later during the day, the US macroeconomic data would also influence sentiment surrounding the greenback and provide fresh impetus for dollar-denominated commodities – like gold.
Technical levels to watch
Immediate support is pegged near $1260 level (yesterday’s low), below which the metal is likely to accelerate the slide towards the very important 200-day SMA support near $1253 region. On the upside, $1270 level now seems to have emerged as immediate resistance, which if cleared might trigger a short-covering bounce back towards $1275 horizontal resistance en-route $1279-80 hurdle.