Gold price corrects farther from 10-month tops, slides to session lows near $1335 level

New York (Feb 21)  Gold finally broke down of its Asian session consolidation phase and was now seen extending the overnight retracement slide from 10-month tops.

The latest FOMC meeting minutes released on Wednesday revealed that there was no consensus among the policymakers over the rate hike path for 2019. Division with regards to future rates policy provided a minor lift to the US Dollar and exerted some downward pressure on the dollar-denominated commodity.

The downside, however, remained cushioned as the Fed signalled it was preparing to stop trimming its balance sheet later this year and expressed a willingness to keep rate hikes on hold, which tends to benefit and drive flows towards the non-yielding yellow metal.

Meanwhile, the latest comments by China's foreign ministry, saying that there was no information of any MoU, extended some additional support to the precious metal's relative safe-haven status. Hence, it would be prudent to wait for a strong follow-through selling before confirming that the commodity might have actually topped out in the near-term and positioning for any meaningful downfall.

Moving ahead, market participants now look forward to the US economic docket, highlighting the release of durable goods orders and Philly Fed manufacturing index, which might influence the USD price dynamics and produce some short-term trading opportunities.

Technical levels to watch

Immediate support is pegged near the $1335 level, which if broken might prompt some additional long-unwinding trade and accelerate the slide towards testing the $1330-28 support area. On the flip side, momentum beyond $1342 level now seems to confront some resistance near the $1346-47 region ahead of $1351-52 supply zone.

FXstreet