Gold hangs near 17-month lows, around $1212 level

Haresh Menghani FXStreet

• Fed rate hike prospects kept a lid on Friday’s goodish rebound.
• A modest USD uptick prompts some fresh selling on Monday.
• Weaker equities extend some support and helped limit downside.

Gold reversed an uptick to $1218 area and is currently placed at the lower end of its daily trading range, around the $1212 region.

The commodity struggled to build on Friday's goodish rebound from 17-month lows and was being capped by a combination of negative factors. The July US monthly jobs report reinforced market expectations that the Fed will stick to its gradual monetary policy tightening cycle and kept a lid on any meaningful up-move for the non-yielding yellow metal.

This coupled with a follow-through greenback buying interest, with the key US Dollar Index holding with modest gains above the key 95.00 handle, was now seen prompting some fresh selling around dollar-denominated commodities - like gold.

Meanwhile, a negative opening across European bourses extended some support to the precious metal's safe-haven appeal and helped limit deeper losses, at least for the time being.

Moving ahead, today's US economic docket lacks any major market-moving economic releases. Hence, the USD price dynamics and broader market risk sentiment might continue to act as key determinants of the commodity's movement on the first trading day of the week.

Technical levels to watch

Immediate support is pegged near $1207-06 area, below which the metal could slide to test the $1200 round figure mark. On the flip side, the $1218-20 region now seems to have emerged as an immediate hurdle, which if cleared might trigger a short-covering bounce and lift the commodity further towards $1224-25 supply 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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