Gold continues losing ground, hits fresh 3-week lows
• Bullish USD sentiment continues to exert downward pressure.
• Traders shrug off risk-off mood/weaker US bond yields.
• Powell’s second testimony eyed for fresh impetus.
Gold extended its steady decline through the mid-European session and is currently placed at fresh three-week lows, around $1310 area.
The US Dollar has managed to preserve recent strong gains, led by the Fed Chair Jerome Powell’s upbeat comments on the US economy, and has been one of the key factors weighing on dollar-denominated commodities - like gold.
Even the prevalent risk-off mood, as depicted by weaker sentiment around global equity markets and further reinforced by sliding US Treasury bond yields, did little to boost the precious metal's safe-haven appeal and stall the ongoing downfall to the lowest level since Feb. 8.
Investors now look forward to the Fed Chair Jerome Powell’s second session of testimony before the Senate Banking Committee, which would influence market expectations over the central bank's monetary policy outlook for 2018 and eventually drive the non-yielding yellow metal in the near-term.
Technical levels to watch
A follow-through selling pressure has the potential to continue dragging the commodity further below $1307 level (Feb. lows) towards testing 100-day SMA support near the key $1300 psychological mark.
On the upside, any recovery attempts might now confront fresh supply near the $1317 level and is followed by a strong supply zone near the $1321-22 region, above which a bout of short-covering could lift the commodity back towards $1328-30 strong hurdle.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
