Gold slips below $1700 mark, over 2-week low

• Gold witnessed some follow-through selling for the third straight session on Wednesday.
• The upbeat market mood, a modest pickup in the USD demand exerted some pressure.
• The commodity moves on the verge of confirming a break below an ascending channel.

Gold dropped to fresh two-week lows in the last hour, with bears now looking to extend the downward trajectory further below the $1700 mark.

A combination of factors kept a lid on the commodity's early attempted recovery move, instead prompted some fresh selling around the $1716 region. The precious metal drifted into the negative territory for the third consecutive session and the downtick seemed rather unaffected by concerns about worsening US-China relations.

The positive news of a potential COVID-19 vaccine added to the recent optimism over the easing of lockdown restrictions across the world and raised hopes of a sharp V-shaped recovery for the global economy. This, in turn, led to some follow-through rally in the equity markets and dented demand for traditional safe-haven assets, including gold.

This coupled with a modest pickup in the US dollar demand exerted some additional pressure on the dollar-denominated commodity and contributed to the latest leg down to the lowest level since May 12. Any subsequent weakness below the $1695-92 horizontal support will confirm a near-term bearish breakthrough over one-month-old ascending trend-channel.

The yellow metal might then accelerate the slide further towards monthly lows support near the $1670 area before eventually dropping to its next major support near the $1660 region.

There isn't any major market-moving economic data due for release from the US. Hence, the broader market risk sentiment coupled with the USD price dynamics might continue to play a key role in influencing the intraday momentum and produce some meaningful trading opportunities.

Technical levels to watch