Gold continues drifting lower, falls to over 19-month low

Haresh Menghani FXStreet

• The ongoing USD rally keeps exerting downward pressure on Wednesday.
• Positive European equities do little to lend any support and stall the downfall.
• Traders now look forward to the US monthly retail sales data for fresh impetus.

Gold extended its bearish trajectory through the Asian session on Wednesday and weakened to its lowest level since late Jan. 2017.

After yesterday's directionless trading action, the precious metal came under some renewed selling pressure on Wednesday and continues to be weighed down by the recent US Dollar upsurge.

Concerns about Turkey's financial crisis pushed the greenback to its highest level since June last year and was seen as one of the key factors exerting downward pressure on the dollar-denominated commodity.

Given that Turkish crisis failed to revive the precious metal's safe-haven demand, a positive opening across European equity markets did little to attract any buyers and stall the ongoing bearish slide.

Meanwhile, the latest leg of downfall since the beginning of this week could also be attributed to some technical selling, especially after bears managed to decisively break through the key $1200 psychological mark.

It, however, remains to be seen if the commodity continues with its downward trajectory or take a brief pause amid near-term oversold conditions and ahead of today's important release of the US monthly retail sales data.

Technical levels to watch

A follow-through selling has the potential to continue dragging the metal further towards $1182-81 intermediate zone en-route its next major support near the $1160-58 region. On the flip side, any attempted recovery back above $1192 level might continue to confront some fresh supply ahead of the $1200 handle, above which a bout of short-covering could lift the commodity back towards $1205-06 support turned resistance.

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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