Gold plummets to 1-1/2 week lows, below $1285 level
| • Risk-on mood/US-China trade optimism keeps exerting pressure for the third straight session.
• Upbeat US data/ modest uptick in the US bond yields add to the selling bias in the last hour.
• Bullish traders seemed rather unimpressed by the ongoing USD downfall to multi-week lows.
Gold extended its steady intraday decline through the early North-American session and dropped to over one-week lows, below $1285 level in the last hour.
The precious metal extended last week's sharp retracement slide from the $1310-11 supply zone and kicked off a new week on a downbeat note, losing ground for the third consecutive session amid the prevalent risk-on mood.
Against the backdrop of Friday's upbeat Chinese trade data, which eased fears of a sharp economic slowdown, growing optimism over a possible US-China trade deal boosted investors’ appetite for riskier assets.
Improving global risk sentiment was evident from a positive tone surrounding equity markets and turned out to be one of the key factors denting the precious metal's perceived safe-haven status.
Adding to this, a modest uptick in the US Treasury bond yields, following the upbeat release of Empire State Manufacturing Index, further collaborated towards driving flows away from the non-yielding yellow metal.
Meanwhile, the prevalent US Dollar selling bias, which tends to underpin demand for the commodity-linked currency, failed to lend any support or stall the ongoing slide back closer to monthly lows.
From a technical perspective, the commodity has now found acceptance below 100-day SMA and a follow-through weakness below $1280 level will confirm a bearish breakdown, paving the way for further depreciating move.
Technical levels to watch
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