Gold extends downslide after strong US economic data
|Having reversed all of its early tepid recovery gains, gold turn lower and extended its weakness for the third consecutive session to touch a six-day low following the release of better-than-expected US economic data.
Currently trading around $1317 level, a stronger-than-expected US GDP growth during the second quarter of 2016, coupled with a lower-than-expected rise in weekly jobless claims, boosted the greenback across the board and attracted fresh selling pressure around the yellow metal. A stronger US Dollar tends to dent demand for dollar-denominated commodities - like gold.
Moreover, the prevalent risk-on sentiment across global financial markets, led by Wednesday's agreement among OPEC members to cut oil production, is further denting demand for traditional safe-haven assets - like Yen and gold.
From technical perspective, the precious metal had broken down from a near-term consolidation phase and remains vulnerable to continue slide further in the near-term.
Technical levels to watch
On the downside, immediate support is pegged at $1310 region (100-day SMA), which if broken decisively would open room for additional depreciating move in the near-term initially towards $1305 horizontal support and eventually below $1300 mark towards $1290 strong support.
Meanwhile on the upside, $1325 level now becomes immediate resistance and even if the commodity manages to clear this immediate barrier, further up-move might now be capped at 50-day SMA near $1331-32 region.
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