• The risk-on mood/positive US bond yields exert some fresh downward pressure.
• A subdued USD price action fails to lend any support or ease the bearish pressure.
• Absent relevant economic releases might continue to prompt some technical selling.
Gold remained under some selling pressure for the third consecutive session and has now dropped to two-week lows, further below $1280 level.
The precious metal failed to capitalize on the early uptick to intraday highs, around $1283-84 region and was now seen extending last week’s rejection slide from the $1295 heavy supply zone.
A follow-through uptick in the US Treasury bond yields, amid the prevalent risk-on mood fueled by optimism over the US-China trade talks, turned out to be one of the key factors weighing on the non-yielding yellow metal.
Meanwhile, a subdued US Dollar price action, which tends to underpin demand for the dollar-denominated commodity failed to lend any support or ease the prevalent selling bias.
Today’s downfall could further be attributed to some technical selling, especially after Friday’s bearish breakthrough over one-week-old consolidative trading range support near the $1286 area.
It would now be interesting to see if the precious metal is able to find any buying interest at lower levels or the current downfall marks the end of a multi-month bullish trend amid absent relevant market moving economic releases.
Technical levels to watch
Immediate support is pegged near the $1275 horizontal level, below which the slide could further get extended towards the $1269-68 region. On the flip side, any meaningful attempted recovery might now confront some fresh supply near the $1285-86 region, which if cleared might lift the commodity back towards $1295 strong resistance.