Gold hits 2-week lows as risk-on prevails at full steam

Dhwani Mehta FXStreet

Gold futures on Comex meander near the lowest levels seen since Oct 6th on Monday, extending selling-off seen last Friday, as the yellow metal continues to face double whammy from broad based US dollar strength on one hand, while risk-on market profile collaborates to the weakness on the other hand.

Gold: Losing sight of $ 1300 mark?

The yellow metal kicked-off this week on a bearish note, as Japanese election outcome remained the main catalyst driving risk sentiment, with news of Abenomics to continue, pushed the Japanese stocks to fresh two-decade highs and further fuelled bullish moods across the financial markets. Persistent risk-on sentiment added to the weight on the non-interest bearing gold.

Moreover, the 2018 US budget approval on Friday pushed the US rates across the horizon, resulting in renewed broad USD strength, which also triggered a sell-off in the USD sensitive gold. Stronger USD makes the dollar-denominated gold more expensive for the holders in foreign currencies and vice-versa.

Over the last hour, however, gold prices are seen making minor-recovery attempts from two-week lows of $ 1275.70 amid the latest headlines that the US is preparing for nuclear war readiness amid North Korea crisis.

Later today, gold will continue to get influenced by the USD dynamics and risk trends amid a lack of fresh fundamentals due out from the US docket.

Gold: Key Levels

To the downside, support levels might be located at $1,275.70 (2-week low), $1,270 (Oct 4 low) and $1,265. On the upside, immediate resistance is seen at $1,282 followed by $1,291 (Oct 20 high) and the $1,300 (psychological mark).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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