Gold Price Analysis: XAU/USD slides back closer to weekly lows, around $1930 area

Gold edged lower during the early European session and dropped back closer to the lower end of its weekly trading range, around the $1930 level.

The precious metal met with some fresh supply on the last trading day of the week and eroded a part of the previous day's modest recovery move from weekly lows. An unexpected jump in the US Initial Jobless Claims added to the market worries about the US economic recovery.

This comes amid the uncertainty over the next round of the US fiscal stimulus measures, which boosted the metal's perceived safe-haven status. However, some renewed US dollar buying interest on Friday prompted some fresh selling around the dollar-denominated commodity.

Meanwhile, the prevalent cautious mood around the equity markets and a softer US Treasury bond yields might help limit deeper losses for the non-yielding yellow metal. This makes it prudent to wait for some strong follow-through selling before placing fresh bearish bets.

It will now be interesting to see if the commodity is able to attract any dip-buying at lower levels or the downtick sets the stage for an extension of the recent sharp corrective slide from record highs set earlier this month.

From a technical perspective, the commodity's inability to capitalize on last week's strong rebound from multi-week lows points to the emergence of some fresh selling. Hence, a subsequent slide back towards the $1900 mark now looks a distinct possibility.

Technical levels to watch