Gold slips below $1700 mark, over 2-week low


  • Gold witnessed some follow-through selling for the third straight session on Wednesday.
  • The upbeat market mood, a modest pickup in the USD demand exerted some pressure.
  • The commodity moves on the verge of confirming a break below an ascending channel.

Gold dropped to fresh two-week lows in the last hour, with bears now looking to extend the downward trajectory further below the $1700 mark.

A combination of factors kept a lid on the commodity's early attempted recovery move, instead prompted some fresh selling around the $1716 region. The precious metal drifted into the negative territory for the third consecutive session and the downtick seemed rather unaffected by concerns about worsening US-China relations.

The positive news of a potential COVID-19 vaccine added to the recent optimism over the easing of lockdown restrictions across the world and raised hopes of a sharp V-shaped recovery for the global economy. This, in turn, led to some follow-through rally in the equity markets and dented demand for traditional safe-haven assets, including gold.

This coupled with a modest pickup in the US dollar demand exerted some additional pressure on the dollar-denominated commodity and contributed to the latest leg down to the lowest level since May 12. Any subsequent weakness below the $1695-92 horizontal support will confirm a near-term bearish breakthrough over one-month-old ascending trend-channel.

The yellow metal might then accelerate the slide further towards monthly lows support near the $1670 area before eventually dropping to its next major support near the $1660 region.

There isn't any major market-moving economic data due for release from the US. Hence, the broader market risk sentiment coupled with the USD price dynamics might continue to play a key role in influencing the intraday momentum and produce some meaningful trading opportunities.

Technical levels to watch

XAU/USD

Overview
Today last price 1699.87
Today Daily Change -11.17
Today Daily Change % -0.65
Today daily open 1711.04
 
Trends
Daily SMA20 1716.43
Daily SMA50 1671.32
Daily SMA100 1629.66
Daily SMA200 1561.83
 
Levels
Previous Daily High 1735.69
Previous Daily Low 1709.09
Previous Weekly High 1765.38
Previous Weekly Low 1717.34
Previous Monthly High 1747.82
Previous Monthly Low 1568.46
Daily Fibonacci 38.2% 1719.25
Daily Fibonacci 61.8% 1725.53
Daily Pivot Point S1 1701.52
Daily Pivot Point S2 1692.01
Daily Pivot Point S3 1674.92
Daily Pivot Point R1 1728.12
Daily Pivot Point R2 1745.21
Daily Pivot Point R3 1754.72

 

 

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