Gold plummets to one-week lows on stronger USD
|Gold fell farther below the psychologically significant level of $1,300 and dropped to one-week lows during early NA session.
The precious metal extended overnight sharp retracement from 3-week tops and remained under heavy selling pressure for the second consecutive session. Persistent US Dollar buying interest has been one of the key factors weighing on dollar-denominated commodities - like gold.
Meanwhile, today's import/export price index data from the US indicated that inflationary pressure could return back to the Fed's target level, sooner than later, and reaffirmed prospects for a gradual increase in interest rates.
Hence, the latest leg of sharp slide over the past hour or so could also be attributed to an upsurge in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.
Later during the NY trading session, a scheduled speech by Philadelphia Fed President Patrick Harker would now be looked upon for some short-term trading impetus.
Technical levels to watch
A follow through selling pressure has the potential to continue dragging the metal back towards 100-day SMA support near the $1275 region with some intermediate support near $1280 area.
On the upside, $1290 level now becomes immediate resistance, which if cleared could help the commodity to recover back towards $1294-95 resistance en-route the $1300 handle.
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