Gold price consolidates in a range, remains vulnerable to slide further

London (June 5)  Gold stalls in its recent decline from levels beyond the $1300 mark - and now seems to have stabilized around the $1290 area

After three consecutive days of decline, the precious metal lacked any firm directional bias and seesawed between tepid gains/minor losses. A combination of diverging forces did little to provide any fresh impetus and led to a range-bound price action through the early European session on Tuesday.

Easing geopolitical tensions, after the White House confirmed the US President Donald Trump's meeting with his North Korean counterpart Kim Jong-un, coupled with improving risk appetite weighed on the precious metal's safe-haven demand.

The downside, however, remained cushioned amid a subdued US Dollar demand and a mildly softer tone around the US Treasury bond yields, which extended some support to the dollar-denominated/non-yielding yellow metal.

Meanwhile, the recent price action, wherein every attempt recovery has been sold into, clearly seems to suggest that the near-term bearish trajectory might still be far from over. Hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility.

Technical levels to watch

Immediate support is pegged near the $1287-86 region and is followed by YTD lows support near the $1282 level, which if broken could accelerate the fall towards $1275 intermediate support en-route $1270 area.

On the upside, $1296-98 region, closely followed by the $1300 handle might continue to act as an immediate resistance, above which the recovery move could get extended back towards $1307-08 barrier (200-DMA).

FXstreet

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