Gold drops to fresh session lows, around $1320 level

New York (Mar 12)  Gold finally broke-down of its post-NFP consolidative trading range and dropped to fresh session lows, around $1320 level.

Friday's sluggish US wage growth data now seems to have eased concerns over rising inflationary pressure and triggered a global risk-on trade, which was eventually seen weighing on the precious metal's safe-haven appeal.

Adding to this, a goodish pickup in the US Treasury bond yields further collaborated towards driving flows away from the non-yielding yellow metal.

Meanwhile, a follow-through US Dollar weakness did little to lend any support to the dollar-denominated commodity and stall the latest leg of downfall, witnessed over the past hour or so.

From a technical perspective, the commodity's inability to build on Friday's sharp rebound, and some renewed selling pressure, now seems to suggest that the near-term downslide might still be far from over. Hence, a fall towards 100-day SMA important support, led by some fresh technical selling, now seems a distinct possibility.

Technical levels to watch

Immediate support is pegged near $1317-16 area, below which the commodity seems all set to aim towards testing 100-DMA support near the $1302 region with some intermediate support near $1312-11 level.

On the upside, $1324-25 zone might continue to act as immediate resistance, which if cleared might trigger a short-covering bounce towards $1333 intermediate hurdle en-route $1341-42 supply zone.

FXstreet

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