Gold keeps the red below $1340 level

Haresh Menghani FXStreet

Gold oscillated in a narrow trading range and was seen consolidating its bearish gap at the start of a new trading week.

The precious metal started the week on back foot and corrected a bit from over 1-year tops on easing concerns over a standoff between the US and N. Korea, which triggered a fresh wave of global risk-on trade and prompted some profit taking.

Adding to this, a strong US Dollar recovery from last week's 2-1/2 year low, further supported by a goodish pickup in the US Treasury bond yields was also seen driving flows away from dollar-denominated yellow metal.

The corrective slide, however, has been limited amid worries fading prospects of any additional Fed rate hike action by the end of this year. Hence, investors' this week would remain focused on important US macro data, including the latest inflation figures and monthly retail sales data.

The data would influence Fed rate hike expectations and eventually provide some fresh directional impetus for the non-yielding metal ahead of the FOMC meeting on Sept. 19 to 20.

• US inflation key ahead of Sept 20 FOMC - ING

Technical levels to watch

On a sustained weakness below $1335 level, leading to a subsequent drop below $1330 level, could extend the corrective slide towards $1325 level en-route the $1315-14 region. Meanwhile, on the upside, any up-move might now confront fresh supply near $1340 level, above which the metal could make a dart back towards $1350 area ahead of $1360 level.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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