Seems vulnerable to slide further
Today news showed Gold held on to its weaker tone through the mid-European session and dropped to one-week lows. Its shown tobe below the $1190 level in the last hour.
Surprisingly a fresh wave of US Dollar buying interest emerged. Followed by the latest trade-related headlines and was seen as one of the key factors exerting some downward pressure on the dollar-denominated commodity.
According to the WTO meeting agenda, China has asked for authorization to impose trade sanctions on the US and added fuel to the recent trade spat between the world’s two largest economies. The greenback was further supported by a positive tone surrounding the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal.
Meanwhile, the prevalent risk-off mood did little to boost the precious metal’s safe-haven demand and stall the ongoing slide, albeit might help limit further sharp declines, at least for the time being.
The latest leg of fall over the past hour or so could also be attributed to some technical selling below a short-term ascending trend-line support on the 1-hourly chart.
With technical indicators on the mentioned chart holding in bearish territory, subsequent weakness, back towards $1185-84 support area, now looks a distinct possibility.
A follow-through selling below the $1185-84 region is likely to accelerate the bearish fall further towards the recent daily closing lows support near the $1174 zone.