Gold tumbles to fresh 6-month lows, below $1275 level
| • Fails to build on early gains led by reviving safe-haven demand.
• Resurgent USD demand prompts some aggressive selling.
• Technical weakness aggravates the fall in the last hour.
After an initial uptick to $1284 area, Gold came under some renewed selling pressure and tumbled to fresh six-month low in the last hour.
In the latest development in escalating trade tensions between the world's two largest economies, the US President Donald Trump planned to impose additional tariffs of 10% to around $200 billion worth of Chinese products.
The news triggered a global wave of risk-aversion trade, as depicted by a sea of red across equity markets and further reinforced by the ongoing slump in the US Treasury bond yields and provided a minor boost to the precious metal's safe-haven appeal.
The uptick, however, was quickly sold into amid resurgent USD demand. In fact, the key US Dollar Index jumped back closer to the key 95.00 psychological mark and prompted some aggressive selling around dollar-denominated commodities - like gold.
The latest leg of sharp downfall over the past hour or so could also be attributed to technical selling below a short-term ascending trend-channel support, forming a part of bearish flag chart pattern on the 1-hourly chart. Hence, a follow-through weakness, possibly towards a medium-term ascending trend-line support, now looks a distinct possibility.
Technical levels to watch
Immediate support is pegged near the $1270-68 region, which if broken would mark a fresh bearish breakdown and pave the way for an extension of the commodity's ongoing bearish trajectory.
On the flip side, $1278-80 region now becomes an immediate hurdle, which if cleared might trigger a short-covering bounce towards $1285-87 intermediate resistance en-route $1290-91 supply zone.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.