Gold price recovers early lost ground, back around $1270 level

London (June 25)  Gold edged lower at the start of a new trading week, albeit has managed to recover early lost ground and is currently holding in the neutral territory around the $1270 region.

A goodish pickup in the US Dollar demand was seen as one of the key factors exerting some fresh downward pressure on dollar-denominated commodities - like gold. After an initial uptick, the metal came under some renewed selling pressure and touched an intraday low near the $1265 region.

However, global trade war tensions, leading to a fresh wave of global risk-off trade, as depicted by weaker sentiment around equity markets, underpinned the precious metal's safe-haven appeal and helped limit further downside.

In the latest trade-related developments, the US President Donald Trump threatened to escalate a trade war by imposing a 20% tariff on European car imports. Trump also planned to bar many Chinese companies from investing in US technology firms and block additional technology exports to Beijing, Wall Street Journal reported on Sunday.

The risk-off mood was evident from the ongoing slide in the US Treasury bond yields, which remained supportive of a modest uptick witnessed around the non-yielding yellow metal.

The broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the commodity's movement in absence of any major market moving economic releases from the US.

Technical levels to watch

Any meaningful up-move is likely to confront resistance near the $1276-77 region and is followed by the $1282-84 supply zone, above which the recovery could get extended towards $1290 hurdle.

On the flip side, $1265 area now seems to protect the immediate downside, which if broken is likely to accelerate the fall even below the $1260 level towards its next support near the $1252-50 region.

FXstreet

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