Gold plummets to fresh session lows near $1280
Gold remained heavily offered at the start of new week and extended the pull-back from over 2-month high level of $1292 struck on Friday.
A combination of improving risk sentiment and broad based greenback recovery dragged the precious metal to fresh session lows near the $1280 region during the early European session.
Easing concerns over geopolitical tensions between the US and N. Korea, further reinforced by a risk-on rally across global equity markets curbed demand for traditional safe-haven assets and was seen weighing heavily on the precious metal.
Moreover, investors now seemed to look past Friday’s softer US inflation figures and hence, a goodish US Dollar recovery, backed by a strong recovery in the US Treasury bond yields was also seen denting demand for dollar-denominated/non-yielding yellow metal.
Meanwhile, possibilities of some stops being triggered, on a sustained weakness below $1285 level, might have also collaborated to the commodity’s sharp fall over the past hour or so.
The commodity has now dropped to post-US CPI swing lows and hence, it would now be interesting to see if it is able to attract some buying interest or extends the profit taking slide amid empty economic docket.
Technical levels to watch
On a sustained weakness below $1280 level, the corrective slide could get extended towards $1274-73 zone en-route $1268-67 important horizontal support. On the upside, any up-move might now confront immediate resistance near $1286 level, above which the metal is likely to head towards testing yearly tops resistance near the $1294-96 region before aiming to reclaim the key $1300 psychological mark.