Gold hammered down to fresh YTD lows, below $1275 level
| • Risk-on mood/US-China trade optimism continues to dampen safe-haven demand.
• Surging US bond yields/a modest USD bounce further add to the bearish pressure.
• Technical selling below March/April lows intensifies the downward momentum.
Gold remained heavily offered through the early North-American session on Tuesday and tumbled to 3-1/2 month lows, or fresh YTD lows around the $1274 region in the last hour.
A fresh wave of global risk-on trade, fueled by easing concerns over a global slowdown and optimism over a possible US-China trade deal, continued dampening the precious metal's perceived safe-haven demand and kept exerting downward pressure for the fourth consecutive session.
This coupled with a goodish pickup in the US Treasury bond yields further collaborated towards driving flows away from the non-yielding yellow metal, taking along short-term trading stops being placed near March/April swing lows support near the $1281 horizontal zone.
Hence, the latest leg of a sudden fall over the past couple of hours could further be attributed to a follow-through technical selling, with a modest US Dollar uptick, despite disappointing US data, further aggravating the selling pressure surrounding the dollar-denominated commodity.
Looking at the technical picture, acceptance below 100-day SMA for the first time since mid-Nov. 2018, and a subsequent break below a key support now opens the room for further depreciating move, albeit oversold conditions on hourly charts might help limit deeper losses, at least for the time being.
Technical levels to watch
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.