Gold price retreats farther from 1-1/2 week tops, flirting with lows ahead of ADP

New York (Mar 7)  Gold extended its steady retracement slide from 1-1/2 week lows and traded with a mild negative bias through the mid-European session.

Reviving fears of a possible global trade war, especially after Gary Cohn's resignation, coupled with a fresh wave of global risk aversion trade initially supported the precious metal's safe-haven appeal.

This coupled with some renewed US Dollar selling pressure, which tends to benefit dollar-denominated commodities - like gold, provided an additional boost and lifted the commodity to an intraday high level of $1340, the highest since Feb. 26.

Despite the supporting factors, the commodity failed to build on early up-move and corrected back closer to the $1330 region. In absence of any fresh development, the slide could be attributed to some profit-taking amid Fed rate hike expectations, which tends to drive flows away from the non-yielding yellow metal.

Traders now look forward to the US private sector employment details - ADP report, for some fresh impetus. The key focus, however, would be on Friday's official job numbers, NFP, which should help determine the next leg of directional move.

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the commodity further towards $1323 intermediate support en-route $1317-16 support. On the upside, $1340 level might continue to act as an immediate hurdle, which if cleared might trigger a follow-through short-covering rally towards $1353 supply zone.

FXstreet