Gold retreats from over 1-week tops, holds above $1330 level

Haresh Menghani FXStreet

• Improving risk appetite now seemed to cap gains.
• US CPI/monthly retails sales to provide fresh impetus.

Gold trimmed some of its early gains to 6-day tops but has still managed to hold with minor gains for the third consecutive session.

Spot prices touched an intraday high near the $1337 region and the up-move was being supported by some follow-through US Dollar weakness, which tends to underpin demand for dollar-denominated commodities - like gold.

This coupled with weaker tone around the US Treasury bond yields remained supportive of the bid tone surrounding the non-yielding commodity.

However, a positive opening around European equity markets did little to boost the precious metal's safe-haven appeal and was now seen capping any additional gains, at least for the time being.

It would now be interesting to see if the current dip is being bought into or the retracement points to an end of the metal's recovery move from last week's 1-month lows.

Today's key focus would remain on the US macro releases - the latest consumer inflation figures and monthly retail sales, which might influence March Fed rate hike expectations and eventually provide some fresh directional impetus.

Technical levels to watch

A follow-through retracement is likely to find immediate support near $1326 horizontal level, below which the downfall could get extended back towards $1320 level en-route $1315-14 support zone.

On the upside, sustained move beyond $1335 level is likely to lift the commodity further beyond $1340-42 hurdle towards retesting $1348-50 supply zone.

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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