Gold hangs near YTD lows, remains vulnerable
| • Persistent USD buying interest keeps exerting downward pressure.
• Improving risk appetite/pickup in the US bond yields add to the selling bias.
Gold struggled to register any meaningful recovery and remained within striking distance of YTD lows, set in the previous session.
With escalating US-China trade tensions doing little to stall overnight sharp retracement, a combination of negative factors kept exerting downward pressure through the early European session on Wednesday.
A strong follow-through US Dollar buying interest was seen denting demand for the dollar-denominated commodity, which coupled with a slight recovery in investors’ appetite for riskier assets, as depicted by a positive opening across European equity markets, also weighed on the precious metal's safe-haven appeal.
Meanwhile, a goodish pickup in the US Treasury bond yields was also seen driving flows away from the non-yielding yellow metal and further collaborated to a mildly weaker tone for the second consecutive session.
Currently trading around the $1273-72 region, market participants now look forward to central bankers' speeches at the ECB Forum on Central Banking, in Portugal, for some fresh impetus.
Technical levels to watch
A medium-term ascending trend-line support, currently near the $1269-68 region, seems to protect the immediate downside, which if broken could pave the way for an extension of the near-term bearish trajectory.
On the upside, the $1276-78 region now seems to act as an immediate hurdle, above which a bout of short-covering might lift the metal back towards weekly highs near the $1283 area en-route $1287 supply zone.
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