Gold drops to fresh session low as USD selling abates
|Gold reversed all of its daily gains to session peak near $1196 region and failed to build on to recovery move from Friday's two-week lows.
The precious metal gained some fresh traction during early Asian session on Monday after the US President Donald Trump's move on Friday to ban travelers from seven Muslim-majority countries from entering the US. The decision weighed on investors' risk sentiment and boosted the metal's safe-haven demand. The up-move, however, lacked momentum amid thin market liquidity conditions in wake of the Lunar New Year holiday in China, South Korea, Hong Kong and Singapore.
Meanwhile, a mild greenback recovery, with the key US Dollar Index reversing some of its early losses, further drove flows away from dollar-denominated commodities - like Gold. Moreover, investors also seemed to refrain from carrying big bets ahead of this week's Fed monetary policy decision and the key monthly jobs report from the US, which would determine the metal's next leg of directional move.
In the meantime, today’s release of the Fed’s preferred inflation gauge – Core PCE Price Index, might provide some impetus and help traders to grab short-term momentum play. The metal was last seen trading around $1191 region, testing fresh session lows.
Technical outlook
Carol Harmer, Founder at charmertradingacademy.com notes, “1194 /1197 is the level to watch this week...we want to see if we can get above here..If we fail then back we go to the 1180/78 support again.. We want to hold this support to stop further downside pressure...Now if we do break 1178 we are looking for 1173 quite quickly....and possibly a further downside move to 1150....Now Gold is beginning to be oversold after the move higher to 1216/18....so this may well support the market at lower levels....We still have this major resistance at 1216/18 and it is going to take something drastic to actually make us move beyond this....”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.