Gold slide to intraday lows, sellers looking to regain control
• USD recovers early losses led by a government shutdown.
• Surging US bond yields add to the downward pressure.
• Fading safe-haven demand does little lend any support.
Having posted a daily high near the $1336 region, gold came under some selling pressure and has now retreated back below $1330 level.
The precious metal initially rose slightly during the Asian session on Monday and was being supported by the US government shutdown. However, a goodish US Dollar rebound capped any additional gains for dollar-denominated commodities - like gold.
This coupled with the recent upsurge in the US Treasury bond yields, backed by firming March Fed rate hike expectations, further weighed on the non-yielding yellow metal.
Even a mildly positive trading sentiment around equity market, pointing to investors' appetite for riskier assets, did little to support the commodity's safe-haven appeal and stall the downslide.
It would now be interesting to see if the metal is able to regain traction or a follow-through USD recovery continues exerting some downward pressure.
In absence of any major market moving economic releases, the metal remains at the mercy of broader market risk sentiment and the USD/US bond yield dynamics.
Technical levels to watch
Immediate support is pegged near $1326-25 area, below which the commodity is likely to accelerate the fall towards $1320 intermediate level en-route the $1311-10 support. On the upside, $1335 level might continue to act as an immediate hurdle and is followed by resistance near the $1340 region.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
