Gold tumbles to fresh one-month lows as USD continues to strengthen
|Gold extended its steady decline through early NA session and has now dropped to fresh one-month lows as the USD extends its strengthening trend.
The precious metal extended previous session's sharp slide and remained under intense selling pressure for the second straight session on Wednesday.
The selling pressure aggravated following the release of better-than-expected US durable goods orders data, which provided an additional boost to the already stronger sentiment surrounding the US Dollar and dented demand for dollar-denominated commodities - like gold.
• USD: Positioning for tax reform? – Rabobank
Against the backdrop of Tuesday's hawkish comment from the Fed Chair Janet Yellen, today's upbeat macro data reinforced market expectations for an additional Fed rate hike move in 2017. The same is being reaffirmed by a sharp spike in the US Treasury bond yields, which further drove flows away from the non-yielding commodity and collaborated to the fall to its lowest level since August 25.
Traders would now take cues from the release of pending home sales data for August, followed by a scheduled speech by the Federal Reserve Governor Lael Brainard.
The key focus, however, would remain on the release of framework for the US President Donald Trump's promised tax reforms, which might act as a key trigger determining the next leg of directional move for the commodity.
• US: Trump expected to provide a framework for the tax reform - BBH
Technical levels to watch
Immediate support is now pegged near $1280 level, below which the metal is likely to accelerate the slide towards $1276 area (August 25 lows) en-route its next major support near the $1270 region.
On the upside, any recovery attempts might now confront fresh supply near $1291 level, which if cleared might trigger a short-covering bounce towards $1300 round figure mark.
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