Gold struggles near 2-week lows, $1400 mark remains in sight
- The Fed’s hawkish rate cut exerts some heavy bearish pressure on Wednesday.
- The ongoing USD bullish run further collaborates to the prevalent selling bias.
- Deteriorating global risk sentiment lends some support and might help limit losses.
Gold dropped to over two-week lows on Thursday, with bears now eyeing a move towards challenging the key $1400 psychological mark.
The precious metal remained under some selling pressure for the second consecutive session on Thursday and added to the previous session's heavy losses, which came after the Fed lowered its benchmark interest rate by 25 bps but signalled that more rate cuts are not guaranteed.
In the post-meeting press conference, the Fed Chair Jerome Powell described the rate cut as a mid-cycle adjustment of policy and said that the move does not necessarily mean the beginning of a series of rate cuts and prompted some aggressive selling around the non-yielding yellow metal.
Meanwhile, the Fed's hawkish cut triggered a fresh leg of an upsurge in the US Dollar, which extended through the early European session on Thursday and further collaborated towards driving flows away from the dollar-denominated commodity.
However, given the fact that the US-China trade negotiations concluded without a major breakthrough, a slight deterioration in the global risk sentiment extended some support to the precious metal's safe-haven status and might turn out to be the only factors that might help limit deeper losses.
Moving ahead, Thursday's US economic docket - highlighting the release of ISM manufacturing PMI, will now be looked upon for some short-term trading impetus later during the early North-American session and ahead of Friday's closely watched US monthly jobs report (NFP).
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
