Gold slides further below $1500 mark, losing around 2.5% for the day


  • Gold failed to capitalize on the early uptick despite a fresh leg down in equity markets.
  • The benchmark 10-year US bond yields jump to 1.2% and exerted some fresh pressure.
  • The global rush to hoard cash benefitted the USD and contributed to the selling bias.

Gold extended its sharp intraday slide and weakened farther below the key $1500 psychological mark through the early European session.

The precious metal failed to capitalize on the overnight goodish intraday bounce and an early uptick to the $1546 region. Traders seemed rather unimpressed by a fresh leg down in the global equity markets, which tends to undermine the commodity's perceived safe-haven status.

A strong follow-through rally in the US Treasury bond yields turned out to be one of the key factors that exerted some fresh downward pressure on the non-yielding yellow metal. In fact, the yield on the benchmark 10-year US government bond jumped back to 1.2% on Wednesday.

This coupled with a sudden pickup in the US dollar demand added to the intraday selling bias surrounding the dollar-denominated commodity. The greenback benefitted from its status as the global reserve currency and a rush to hoard cash to ride through the coronavirus crisis.

However, growing concerns over the economic fallout from the coronavirus pandemic – despite the recent efforts from major central banks and various government measures to offset recession fears – might lend some support to the commodity.

Hence, it will be prudent to wait for some strong follow-through selling, possibly below the recent swing lows to over one-month lows, around the $1450 region, before positioning for any further near-term depreciating move for the metal.

Technical levels to watch

XAU/USD

Overview
Today last price 1494.04
Today Daily Change -34.84
Today Daily Change % -2.28
Today daily open 1528.88
 
Trends
Daily SMA20 1616.93
Daily SMA50 1587.13
Daily SMA100 1535.95
Daily SMA200 1500.99
 
Levels
Previous Daily High 1554.06
Previous Daily Low 1465.8
Previous Weekly High 1703.4
Previous Weekly Low 1504.72
Previous Monthly High 1689.4
Previous Monthly Low 1547.56
Daily Fibonacci 38.2% 1520.34
Daily Fibonacci 61.8% 1499.52
Daily Pivot Point S1 1478.43
Daily Pivot Point S2 1427.99
Daily Pivot Point S3 1390.17
Daily Pivot Point R1 1566.69
Daily Pivot Point R2 1604.51
Daily Pivot Point R3 1654.95

 

 

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