Gold holds weaker near one-week lows, around $1250 level

Haresh Menghani FXStreet

• A goodish pickup in the USD demand prompts some fresh selling.
• Escalating US-China trade tensions fail to revive safe-haven demand.

Gold remained under some selling pressure for the second consecutive day, albeit has managed to hold its neck just above one-week lows set in the previous session.

Currently trading around the $1251 region, the commodity has lost over 1% from near two-week tops touched on Monday and seemed unaffected by reviving safe-haven demand led by escalating US-China trade tensions.

The Trump administration threatened to impose additional tariffs on $200 billion worth of Chinese imports and triggered a fresh wave of global risk aversion. The risk-off mood was evident from a sharp slide in the US Treasury bond yields but did little to revive the non-yielding yellow metal's safe-haven appeal.

Meanwhile, a goodish pickup in the US Dollar demand, which tends to dent demand for dollar-denominated commodities, was seen as the only factor exerting some fresh downward pressure through the early European session on Wednesday.

It would now be interesting to see if the commodity is able to find any buying interest at lower levels or the current pull-back marks the end of recent corrective bounce from YTD lows.

Technical levels to watch

A follow-through weakness below the $1247-46 immediate support might turn the metal vulnerable to slide back towards challenging YTD lows support near the $1238 area.

On the flip side, any meaningful up-move is likely to confront fresh supply near $1260 level, above which the commodity could aim towards retesting the recent swing high, near the $1265-66 region.

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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