Gold plummets to fresh session lows, weakens farther below $1300
| • Rebounding US bond yields triggered the initial leg of the downfall.
• A goodish pickup in the USD demand adds to the bearish pressure.
• Technical selling below $1300 mark intensifies the intraday slide.
Gold remained heavily offered through the early North-American session and tumbled to fresh daily lows in the last hour.
After a brief mid-session consolidation phase, the previous metal met with some fresh supply and extended its sharp intraday retracement slide from 1-1/2 week tops. The initial leg of weakness was triggered by a goodish rebound in the US Treasury bond yields, which tend to drive flows away from the non-yielding yellow metal.
Adding to this, a sudden pickup in the US Dollar demand exerted some additional downward pressure on the dollar-denominated commodity, which coupled with possibilities of some short-term trading stops being triggered on a sustained weakness below the key $1300 psychological mark further aggravated the bearish pressure.
Meanwhile, the prevalent cautious mood, as depicted by softer tone around equity markets did little to lend any support to the precious metal's relative safe-haven demand, with bulls also failing to gain any respite from today's second-tier US economic releases - initial weekly jobless claims and import/export price indices.
With today's steep decline, the commodity reversed intra-week gains and has now moved within striking distance of weekly lows. Hence, a follow-through weakness, possibly below the $1290 horizontal support, now looks a distinct possibility.
Technical levels to watch
A convincing break below the mentioned support is likely to accelerate the downfall further towards the commodity's next major support near the $1286-85 region. On the flip side, the $1297 level, closely followed by the $1300 handle now seems to act as an immediate resistance, which if cleared might lift the metal back towards testing the $1309-10 supply zone.
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