• Trades with modest losses for the second consecutive session. • Bulls fail to capitalize on the risk-off mood/subdued USD demand. • The Fed Chair Jerome Powell’s testimony eyed for fresh impetus.
Gold extended its steady decline from intraday highs, around the $1330 area, and is currently placed at the lower end of its daily trading range.
Having failed to capitalize on Friday's attempted bounce, the precious metal traded with a mild negative bias and has now moved within striking distance of last week's swing low. The commodity did get a minor lift during the Asian session on Tuesday amid reviving safe-haven demand in wake of rising geopolitical tensions in the Asian continent, albeit lacked any strong follow-through.
The latest optimism over the US-China trade negotiations, especially after the US President Donald Trump said that he will extend a deadline to escalate tariffs on Chinese imports, kept a lid on any further up-move. Meanwhile, bulls seemed rather unimpressed by a subdued US Dollar price action, which tends to underpin demand for the dollar-denominated commodity, rather preferred to wait on the sidelines ahead of today's key event risk.
The Fed Chair Jerome Powell's two-day testimony to Congress will be closely scrutinized for the central bank's view on monetary policy and might provide a fresh directional impetus for the non-yielding yellow metal. This coupled with a slew of important macro data, including Chinese PMI prints and the revised US Q4 GDP growth figures, will further contribute towards determining the commodity's near-term trajectory.
Technical levels to watch
Immediate support is pegged near the $1321 area, below which the metal is likely to accelerate the slide towards the $1315-14 region en-route the next major support near the $1305 horizontal zone. On the flip side, the $1331-33 region now seems to have emerged as an immediate hurdle, which if cleared might lift the commodity back towards $1340 supply zone.
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