Gold slides on easing geopolitical tensions, but holds above $1300 mark
Gold traded with a slight negative bias and extended previous session's retracement from 9-1/2 month highs amid improving investors' risk appetite.
The latest geopolitical tensions between the US and N. Korea seems to have eased a bit, which is being reinforced by a risk-on rally in global equity markets and was seen weighing on the precious metal's safe-haven appeal.
Meanwhile, Tuesday's upbeat consumer confidence index, surging to a five month high in August, now seems to support the view that the US economic growth would accelerate in the second half of the year that would keep the Fed on track to deliver a third rate hike by the end of this year.
• Fed may be more cautious, but unlikely to change course - AmpGFX
Hence, a goodish pickup in the US Treasury bond yields, underpinning the US Dollar demand was also seen denting demand for non-yielding/dollar-denominated yellow metal.
Despite the pullback, the metal has managed to hold its neck above the $1300 mark as investors remained cautious ahead of today's crucial macro data from the US, due for release later during the NA session.
Wednesday's US economic docket features the release of ADP report, which is seen as a precursor to Friday's official NFP data, and the first revision of Q2 growth figures.
Technical levels to watch
Weakness below $1304 level is likely to find support near the $1300 round figure mark, which if broken could extend the corrective slide towards $1296-95 strong resistance break-point now turned support.
On the upside, $1311 level seems to act as immediate resistance, above which the metal is likely to dart back towards yesterday’s swing highs near $1325-26 area with some intermediate resistance near $1320 level.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
