Gold retreats further, holds weaker around $1325 level

Haresh Menghani FXStreet

Gold extended its profit taking slide from its highest level in over a year and traded with mild negative bias through early Asian session on Tuesday.

Improving investors' risk appetite, on fading worries over geopolitical tensions surrounding North Korea and weaker-than-expected Hurricane Irma drove investors away from traditional safe-haven assets, including gold.

The precious metal was also being weighed down by a sharp US Dollar recovery, supported by a strong uptick in the US Treasury bond yields, which tends to dent demand for dollar-denominated commodities.

The recent pullback represents lightening of some long bets ahead of the key US inflation figures for August, due for release on Wednesday. The incoming US economic data would be looked upon for additional clarity over possibilities of any additional Fed rate hike action by the end of this year and eventually help determine the next leg of directional move for the non-yielding yellow metal.

Technical levels to watch

A follow through weakness below $1325 level could further get extended towards $1321 horizontal support with some intermediate support near $1316-14 area. On the upside, any recovery attempts beyond $1329 level might now confront fresh supply near $1333 area, above which the metal is likely to recover back towards $1340 hurdle.

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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