Gold consolidates in a range, hangs near 6-week lows

Haresh Menghani FXStreet

• The prevalent USD buying interest continues to exert some downward pressure.
• Global growth concerns/cautious mood seemed to help limit further downside.
• Traders now eye US ISM non-manufacturing PMI for some short-term impetus.

Gold extended its bearish consolidative price action on Tuesday and remained within striking distance of near six-week lows set in the previous session.

The precious metal failed to capitalize on the overnight attempted rebound, led by a sharp fall in the US equity markets and remained under some selling pressure for the fifth consecutive session on Tuesday.

Persistent US Dollar buying interest, supported by the recent upsurge in the US Treasury bond yields, was seen as one of the key factors driving flows away from the dollar-denominated/non-yielding yellow metal.

The downside, however, remained cushioned amid the prevalent cautious mood around equity markets amid global growth concerns, especially after China lowered its GDP growth target to 6.0%-6.5% for 2019.

It would now be interesting to see if the commodity is able to find any support at lower levels or continues with its recent sharp corrective slide from multi-month tops, around the $1346-47 region touched on Feb. 20.

Today's US economic docket, highlighting the release of ISM non-manufacturing PMI and new home sales data will now be looked upon for some short-term trading impetus during the early North-American session.

The key focus, however, will be on Friday's closely watched US monthly jobs report, popularly known as NFP, which might help determine the commodity's next leg of a directional move.

Technical levels to watch

Immediate support is pegged near the $1278-77 region, below which the commodity could extend its downward trajectory further towards $1265 support area. On the flip side, the $1294-95 region, followed by the key $1300 psychological mark now seems to act as an immediate resistance, above which a bout of short-covering could lift the metal further towards $1310-12 resistance zone.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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