Gold plummets to near 2-month lows, around $1460
- US-China trade optimism continues to weigh on the commodity’s safe-haven status.
- Rising US bond yields fueled the ongoing USD bullish run and add to the selling bias.
- The overnight breakthrough neckline support further aggravates the bearish slide.
Gold added to its recent losses and dropped to near two-month lows, around the $1460 region during the early European session on Tuesday.
A combination of forces kept exerting downward pressure for the third consecutive session on Tuesday - also marking its fourth day of a negative move in the previous five - and contributed to the precious metal's ongoing corrective slide from multi-year tops set on September 4.
Risk-on mood adds to the recent selling bias
Against the backdrop of growing optimism over a possible resolution of the prolonged US-China trade dispute, the prevalent risk-on mood was seen as one of the key factors weighing on traditional safe-haven assets and exerting some heavy pressure on the precious metal Gold.
Improving global risk was reinforced by a strong follow-through pickup in the US Treasury bond yields higher, which provided an additional boost to the ongoing US Dollar bullish run to two-year tops and further collaborated towards driving flows away from the non-yielding yellow metal.
Tuesday's downfall could also be attributed to some technical selling, especially after the previous session's decisive break below the $1483-80 horizontal zone - marking the neckline support of a bearish head and shoulders pattern formation on the daily chart.
Hence, a subsequent slide back towards testing a previous strong resistance, now turned support near the $1448-47 region, now looks a distinct possibility ahead of Tuesday's important release of the US ISM manufacturing PMI for September, due later during the early North-American session.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
