- 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
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.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0550 after mixed US data
EUR/USD stays under modest bearish pressure and trades below 1.0550 in the American session. Although the US Dollar struggles to gather strength following mixed macroeconomic data releases, the risk-averse market environment doesn't allow the pair to gain traction.
GBP/USD recovers modestly, trades near 1.2650
GBP/USD stabilizes near 1.2650 after falling toward 1.2600 earlier in the day. Nevertheless, the pair struggles to gather bullish momentum as the deepening Russia-Ukraine conflict causes investors to stay away from risk-sensitive assets.
Gold extends gains beyond $2,660 amid rising geopolitical risks
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.