- Bullion retreats further on strong USD.
- Spot gold in multi-month lows.
- Gold ignores potential geopolitical jitters.
The ounce troy of the safe haven metal continues to shed ground during the second half of the week and is now approaching the key $1,250 area, or 5-month lows.
Gold down on solid USD
The demand for the yellow metal remains subdued amidst a strong pick up in the sentiment surrounding the greenback, particularly after the Senate passed the tax reform bill earlier in the week.
In this regard, the way appears paved for President Trump to sign off the bill before Christmas, giving extra legs to the buck’s rally.
Also weighing on the yellow metal, prospects of further tightening by the Federal Reserve via rate hikes remain solid for the next year despite US inflation still lacks of sustainable upside traction.
Bullion has extended the downside this week in spite of the rising effervescence in the Middle East after President Trump recognized Jerusalem as Israel’s capitol city.
Gold key levels
As of writing Gold is down 0.72% at $1,257.00 and a breakdown of $1,251.68 (low Aug.8) would open the door to $1,243.88 (low Jul.26) and finally $1,204.95 (low Jul.10). On the other hand, the next upside barrier is located at $1,267.70 (200-day sma) seconded by $1,280.77 (21-day sma) and then $1,289.24 (high Dec.1).