• A subdued USD demand/retracing US bond yields helps ease the bearish pressure.
• Reviving safe-haven demand provides an additional boost and remains supportive.
• Fresh technical selling to emerge on every recovery attempts beyond $1300 mark.
Gold prices edged higher through the early European session on Wednesday and has now recovered a part of previous session slump to fresh 2018 lows.
On Tuesday, a stronger US Dollar, supported by surging US bond yields prompted some aggressive selling around dollar-denominated commodities - like gold. Adding to this, reviving hopes that the Fed might opt to raise interest rates faster than priced in the market aggravated the bearish pressure and dragged the non-yielding yellow metal below the $1300 mark to its lowest level since December 28.
The selling pressure now seems to have abated, at least for the time being, with a modest retracement in the US Treasury bond yields and subdued USD price-action helping the commodity to stage a minor recovery from near-term oversold conditions.
It would now be interesting to see if the metal is able to build on the momentum or the uptick is utilized as an opportunity to initiate some fresh short-positions, especially after yesterday's bearish breakdown below the very important 200-day SMA.
Moving ahead, today's US economic docket, featuring the release of housing market data, along with a scheduled speech by Atlanta Fed President Raphael Bostic would now be looked upon for some fresh impetus later during the early NA session.
Technical levels to watch
Currently trading around $1296 level, immediate resistance is now pegged near the $1300 handle, above which a fresh bout of short-covering could lift the commodity back towards testing 200-DMA support break-point near the $1307 region.
On the flip side, $1290 level now seems to have emerged as an immediate support, which if broken now seems to open room for a continuation of the commodity's bearish trajectory further towards testing its next support near the $1278 area.
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 securities. 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 Forex 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.