Gold tumbles to lows, weighed down by notable USD demand
• Resurgent USD offset risk-off environment.
• Long-unwinding adds to the selling pressure.
Gold came under some intense selling pressure during the early NA session and tumbled to session lows, eroding a major part of previous session's up-move.
Despite a selloff in global equity markets, which tends to underpin demand for traditional safe-haven assets, the precious metal failed to build on its early up-move and has now retreated over $10 from session high level of $1346.
A strong wave of US Dollar buying interest, backed by a goodish rebound in the US Treasury bond yields is turning out to be the only factor weighing heavily on dollar-denominated/non-yielding yellow metal.
The price-action also seems to indicate some long-unwinding pressure below $1340 level, which was seen lending some support through the mid-European session.
With markets shrugging off a strong risk-off environment, the USD price dynamics might continue to act as an exclusive driver of the commodity's momentum in absence of any major market moving economic releases.
Technical levels to watch
A follow-through weakness has the potential to continue dragging the commodity towards its next support near the $1328-26 region, below which the fall could get extended towards $1320 horizontal level.
On the upside, $1340 level now seems to act as immediate resistance, which if cleared could lift the commodity back towards $1345-46 supply zone en-route $1350 area.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
