• Goodish USD rebound continues to exert downward pressure. • Traders shrug off today’s mixed US economic releases. • Improving risk appetite does little to revive safe-haven demand.
Gold faded mixed US economic data-led early NA session spike back closer to $1330 and refreshed session lows in the last hour.
With investors looking past the sudden firing of the US Secretary of State Rex Tillerson, a goodish pickup in the US Dollar demand continued exerting some downward pressure on dollar-denominated commodities - like gold.
Moreover, the incoming US data has been pointing to no significant pick-up in inflation and was seen denting the yellow metal's demand as a hedge against inflation. This coupled with a positive opening in the US equity markets, which tends to dampen demand for traditional safe-haven assets, further collaborated to the precious metal's sharp fall over the past hour or so.
However, fading expectations that the Fed might opt for an aggressive monetary policy tightening cycle, evident from the recent slide in the US Treasury bond yields, might help limit further downside for the non-yielding commodity, at least for the time being.
Meanwhile, the recent price action over the past one-week, within a broader trading range, clearly seems to suggest indecision over the metal's near-term trajectory. Hence, traders are likely to wait for a decisive break through the near-term trading range before positioning for the next leg of directional move.
Technical levels to watch
Immediate support is pegged near $1316 level and is followed by support near $1313-12 area, which if broken could drag the metal towards 100-day SMA support near the $1303-02 region.
On the upside, $1325-26 zone now seems to act as an immediate hurdle, which if cleared could accelerate the up-move towards $1333 intermediate resistance en-route $1340 supply zone.
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