Gold price slides to $1312 level, reverses overnight attempted bounce

New York (Feb 6)  Gold dropped to fresh session low in the last hour, around the $1313-12 region, and has now erased a major part of the previous session's modest uptick.

The precious metal failed to build on the overnight attempted bounce from closer to near one-week lows and came under some renewed selling pressure on Wednesday in wake of the continuation of the recent US Dollar.

The greenback managed to recover a major part of its losses posted in reaction to a dovish FOMC message and was seen as one of the key factors exerting some fresh downward pressure on the dollar-denominated commodity.

Meanwhile, the prevalent cautious mood around European equities, reinforced by a modest pull-back in the US Treasury bond yields, also did little to boost the non-yielding yellow metal's relative safe-haven status.

With the USD price dynamics turning out to be an exclusive driver of the commodity's momentum, market participants now look forward to second-tier US economic releases for some short-term trading impetus.

Technical levels to watch

Immediate support is pegged near the $1308 region, below which the commodity is likely to accelerate the slide further towards the key $1300 psychological mark with some intermediate support near the $1303-02 area.

On the flip side, the $1314-15 region now becomes immediate resistance, which if cleared might trigger a short-covering bounce further towards $1321 supply zone en-route multi-month tops, around the $1326 level.

FXstreet