Gold plummets to fresh YTD lows, remains vulnerable to slide further

   •  Wednesday’s not so dovish FOMC statement continues to weigh on the commodity.
   •  US-China trade optimism dents safe-haven demand and adds to the bearish pressure.
   •  A subdued USD price action does little to lend any support or stall the ongoing slide.

Gold finally broke down of its mid-European session trading range and tumbled further below $1270 level to refresh YTD lows in the last hour.

The precious metal extended overnight sharp intraday pullback from the $1287-88 supply zone and remained under some intense selling pressure for the second consecutive session on Thursday. This comes after the FOMC statement showed a more upbeat assessment of the economic developments and dampened prospects for any rate cut this year, which was seen driving flows away from the non-yielding yellow metal.

This coupled with growing optimism over US-China trade negotiations, further fueled by reports that the world's two largest economies may announce a trade deal by next Friday, further weighed on the precious metal's safe-haven status. Meanwhile, a modest US Dollar uptick over the past hour or so further aggravated the pressure on the dollar-denominated commodity and collaborated to the ongoing bearish slide.

Today's sharp intraday decline could further be attributed to some follow-through technical selling, especially after the post-FOMC slide below the $1278-77 horizontal support and a subsequent break through the $1270 level. Hence, a follow-through weakness, amid some repositioning trade ahead of Friday's release of the closely watched US monthly jobs report (NFP), now looks a distinct possibility.

Technical levels to watch