• Resurgent USD demand prompts fresh selling. • Surging US bond yields exert additional pressure.
Gold came under some renewed selling pressure on Tuesday and resumed with its corrective slide from last week’s three-and-a-half month highs.
The precious metal struggled to build on overnight rebound and was now being weighed down by a strong follow-through US Dollar buying interest. The greenback built on its post-NFP up-move and was eventually seen denting demand for dollar-denominated commodities - like gold.
Meanwhile, growing expectations for additional Fed rate hike moves through 2018, backed by the recent hawkish rhetoric by various FOMC member triggered a fresh leg of an upsurge in the US Treasury bond yields and further drove flows away from the non-yielding yellow metal.
Meanwhile, the prevailing strong bullish sentiment across global equity markets did little to revive demand for traditional safe-haven assets and stall the commodity's retracement slide back $1315-13 support area.
In absence of any major market moving economic releases, the metal remains at the mercy of USD/US bond yield dynamics as traders look forward to other US macro data, including the latest inflation figures.
Technical levels to watch
A follow-through selling pressure could extend the corrective slide towards $1305 intermediate support en-route the $1300 handle and 100-day SMA support near the $1290-88 region.
On the flip side, $1320 level, closely followed by $1326 area might continue to act as immediate hurdles, above which the metal could be headed towards $1332-33 supply zone.
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