Gold weaker around $1280, further downside seems limited ahead of French polls

Gold came under some fresh selling pressure on Friday and has now reversed previous session's tepid up-move, to currently trade marginally below $1280 level.

With geopolitical tensions taking the backseat, improving investors’ appetite for riskier assets - like equities, was seen denting demand for traditional safe-haven assets and failed to assist the precious metal to build on yesterday's recovery move from closer to weekly lows.

Meanwhile, against the backdrop of renewed optimism around the US President Donald Trump's pro-growth economic policies following overnight comments by the US Treasury Secretary Mnuchin, a mildly positive tone around the greenback, with the key US Dollar Index moving away from three-week lows touched yesterday, further weighed on dollar-denominated commodities - like gold.

Looking at the larger picture, nervousness ahead of the crucial French President election might continue to limit any further sharp downslide as a surprise outcome would trigger a fresh bout of volatility across global financial markets and drive investors back towards traditional safe-haven assets, including gold.

• IFOP Poll: Most French police officers to vote for Le Pen in Sunday's election

With the scheduled release of flash PMI prints and existing home sales data, today's US economic docket lacks any major market moving data. Hence, focus would be on Minneapolis Fed President Neel Kashkari's speech, which would be looked upon for some fresh clues over the central bank's monetary policy outlook and might eventually derive demand for the non-yielding yellow metal.

Technical levels to watch

Immediate support is pegged near $1275-74 area, below which the commodity seems more likely to break below $1271-70 support and head towards retesting $1262-61 important support.

On the upside, momentum above $1283-85 immediate hurdle could lift the metal back towards $1290 horizontal resistance, which is followed by multi-month highs resistance near $1295 area.

Share: Feed news

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 assets. 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 Open Markets 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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.