Gold struggles near weekly lows, seems vulnerable
• A modest USD weakness/US bond yields fail to lend any support.
• Fading safe-haven demand adds to the downward pressure.
• Likely to extend the ongoing retracement slide from 6-week tops.
Gold held with modest weakness through the early NA session on Thursday and is currently placed near week lows, around the $1322 region.
The precious metal remained under some selling pressure for the third consecutive day and has failed to gain any respite despite a modest US Dollar weakness, which tends to benefit dollar-denominated commodities.
Even the ongoing slide in the US Treasury bond yields did little to lend any support and stall the non-yielding yellow metal's downfall to over one-week lows.
Meanwhile, a bullish trading sentiment around European equity markets and a positive opening across the US bourses further dented the commodity's safe-haven appeal and collaborated to the weaker tone.
With today's fall, the metal has now retreated around 2.5% from near 6-week tops touched on Tuesday, with a follow-through weakness, led by some fresh long-unwinding trade, now looking a distinct possibility.
Technical levels to watch
A follow-through weakness below $1320 level is likely to accelerate the slide towards $1316 horizontal support, which if broken might turn the commodity vulnerable to test 100-day SMA support near the $1309 region.
On the upside, $1329-30 area now seems to have emerged as an immediate hurdle and is followed by resistance near the $1335 region, above which a bout of short-covering could lift the metal back towards $1345-46 supply zone.