Gold price extends overnight slide from over 1-week tops, back near $1250

New York (July 5)  Gold came under some renewed selling pressure on Thursday and has now erased all of its previous session's gains to over one-week tops.

The precious metal stalled two days of goodish recovery move from YTD lows and failed to benefit from the ongoing trade war fears. Even a subdued US Dollar demand, which tends to underpin dollar-denominated commodities, did little to provide any fresh bullish impetus.

The prevalent risk-on mood, as depicted by strong gains across European bourses and indications of a positive opening in the US equity markets, was seen as one of the key factors weighing on traditional safe-haven assets and dragging the precious metal lower. Adding to this, a modest uptick in the US Treasury bond yields was also seen driving flows away from the non-yielding yellow metal and collaborating to the downfall.

Investors now look forward to the US economic docket, featuring the release of ADP report on private sector employment and ISM non-manufacturing PMI. This along with the latest FOMC meeting minutes and Friday's official monthly jobs report (NFP) will help determine the commodity's next leg of directional move.

Technical levels to watch

A follow-through retracement below $1250 level is likely to accelerate the fall towards $1246 horizontal support before the metal eventually heads back towards retesting YTD lows support near the $1238 region.

On the flip side, $1260-61 area now seems to act as n immediate hurdle, above which the recovery move could further get extended back towards $1272 supply zone en-route $1276-77 strong hurdle.

FXstreet