Gold drops back to session lows, around $1325 level

Haresh Menghani FXStreet

• Easing USD bearish pressure prompts some fresh selling.
• Fading safe-haven demand adds to the downward pressure.

Gold surrendered its early gains to $1330 area, or one-week tops, and has now retreated to the lower end of the daily trading range.

A combination of factors, ranging from fading Fed rate hike expectations and the latest White House exits, kept exerting downward pressure on the US Dollar and benefitted dollar-denominated commodities - like gold.

Adding to this, the US President Donald Trump's plan to impose tariffs on China, reviving global trade war fears, provided an additional boost and lifted the precious metal to an intraday high level of $1330.

Despite supportive factors, the up-move already seems to have run out of steam and was now being capped by a modest USD rebound. Moreover, a modest rebound in investors’ appetite for riskier assets - like equities was seen denting demand for traditional safe-haven assets and collaborated to the commodity's retracement slide.

Currently trading around $1325 level, investors now look forward to a duo of US macro releases - monthly retail sales data and the latest PPI figures, for some fresh impetus.

Technical levels to watch

Immediate support is now pegged near $1321 area, below which the metal seems to head back towards challenging $1314-13 strong support before eventually dropping to test 100-day SMA support near the $1303-02 region.

On the upside, $1330 level now seems to have emerged as an immediate resistance, above which the commodity seems to dart towards testing $1340 supply zone en-route its next major hurdle near $1350 level.

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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