Gold Review: Flirts with an important horizontal support, near $1218 level


   •  Fails to attract any buying interest despite a subdued USD price action.
   •  Cautious mood/weaker US bond yields do little to lend any support.

Gold traded with a negative bias for the fourth consecutive session and has now moved on the verge of breaking below an important horizontal support near the $1218 region.

Despite a subdued US Dollar demand, which tends to underpin dollar-denominated commodities the precious metal failed to attract any buying interest and remains within striking distance of YTD lows, set earlier this month.

Even the prevalent cautious mood around European equity markets, further reinforced by a weaker tone around the US Treasury bond yields also did little to lend any support to the precious metal's safe-haven appeal. 

Meanwhile, firming expectations that the Fed will stick to its plan to continue raising interest rates through the end of this year turned out to be one of the key factors exerting downward pressure on the non-yielding commodity. 

Hence, the key focus would remain on the latest FOMC monetary policy update on Wednesday, which along with the keenly watched US monthly jobs report (NFP) should help investors determine the commodity's next leg of directional move.

Technical Analysis

From a technical perspective, a convincing break below the $1218 horizontal support would confirm a bearish double-top chart pattern formation on the 1-hourly chart and pave the way for an extension of the near-term downward trajectory, back towards challenging YTD lows, around the $1212-11 region.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

GBP/USD attempts recovery amid as Johnson's condition is in focus

GBP/USD is trading above 1.23 as the focus remains on PM Johnson's condition. The 55-year old is in intensive care, receiving oxygen and Foreign Secretary Raab is in charge.

GBP/USD News

EUR/USD rises toward 1.09 amid a better market mood

EUR/USD is trading closer to 1.09, up amid falling coronavirus cases in the old continent and as German industrial output beat expectations with 0.3% for February. New US fiscal stimulus is also eyed.

EUR/USD News

Crypto starship starts the engines, pointing beyond limits

The bullish scenarios are fulfilled and bring the Top 3 to the launch pad. Ether's dominance shoots up and improves by more than 10% in a single day. The movement shows strong potential not seen since the 2017 bump.

Read more

Gold corrects from multi-week tops, slides further below $1650 level

Gold finally broke down of its Asian session consolidation phase and dropped to fresh session lows, around the $1645 region in the last hour.

Gold News

WTI stays relatively calm near $27 as markets wait for fresh clues on output cuts

Crude oil prices started the week on the back foot with the barrel of West Texas Intermediate (WTI) erasing 8.75% on a daily basis to close at $26.28.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures