Published: 2/19/2018 8:11:00 AM
• Subdued USD price-action fails to provide fresh impetus.
• Rising equities further denting safe-haven demand.
Having faded an early Asian session spike to an intraday high level of $1351.40, gold entered a consolidation phase and is currently placed at the lower end of its daily trading range.
The US Dollar wavered between tepid gains/minor losses and has failed to provide any meaningful directional impetus to dollar-denominated commodities - like gold. Adding to this, rising equity markets was further seen dampening the precious metal's safe-haven appeal and collaborated to a mildly weaker tone.
A combination of the above-mentioned factors now seems to have offset concerns about rising inflation and did little to boost demand for the yellow metal as a hedge against inflation.
Meanwhile, holiday-thinned liquidity conditions helped limit any deeper losses, at least for the time being. Hence, it would be prudent to wait for a strong follow-through selling before positioning for any additional near-term weakness.
Technical levels to watch
On a sustained break below $1345-44 immediate support, the metal is likely to accelerate the fall towards $1340 level before eventually dropping towards its next support near the $1332-31 region.
On the upside, $1350-51 area might continue to act as an immediate hurdle and is followed by resistance near $1358 level, above which the commodity seems all set to aim towards testing the $1366 region.
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