Gold: Bearish pressure remains unabated amid broad-based USD strength
| • Resumption of the USD bullish run prompts some fresh selling.
• Firming Fed rate hike expectations add to the bearish pressure.
• A slight deterioration in risk-appetite does little to lend any support.
Selling pressure around the precious metal remains unabated, with spot Gold prices tumbling to fresh one-year lows during the mid-European session.
After yesterday's brief pause, led by disappointing US housing market data, a fresh wave of US Dollar buying interest emerged on Thursday and was one of the key factors prompting some aggressive selling around dollar-denominated commodities - like gold.
Upbeat economy outlooks offered by the Fed Chair Jerome Powell and the central bank’s Beige Book report added to market bets that the Fed would stick to its plan to continue raising interest rates gradually. The same was evident from a goodish pickup in the US Treasury bond yields, which provided an additional boost to the buck and further collaborated towards driving flows away from the non-yielding yellow metal.
Meanwhile, the prevalent cautious sentiment around equity markets, which tends to support the precious metal's safe-haven demand, also did little to stall the ongoing slump to $1215 level, the lowest level since July 2017.
With the USD price dynamics turning out to be an exclusive driver of the bearish momentum, the commodity seems unlikely to find any respite from today's second-tier US economic data.
Technical levels to watch
A follow-through selling has the potential to continue dragging the metal towards $1205 (July 2017 low) en-route the $1200 round figure mark. On the flip side, any recovery attempts might now confront immediate hurdle near $1220 level and is followed by resistance near $1227-28 region.
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