Gold struggles near 2-week lows, US GDP/Powell’s speech in focus
• The risk-on mood continues to dampen commodity’s safe-haven demand.
• Clarida’s overnight hawkish comments further add to the bearish bias.
• Revised US GDP print/Powell’s scheduled speech eyed for fresh impetus.
Gold struggled to register any meaningful recovery and remained within striking distance of near two-week lows, touched in the previous session.
A combination of negative factors prompted some aggressive selling on Tuesday and dragged the commodity below an important horizontal support near the $1220 region to retest 100-day SMA.
The prevalent bullish sentiment surrounding the US Dollar, supported by resurfacing US-China trade tensions, was seen as one of the key factors weighing on the dollar-denominated commodity.
Adding to this, hawkish comments by the Fed Vice Chair Richard Clarida, backing additional rate hikes, further collaborated towards driving flows away from the non-yielding yellow metal.
Meanwhile, a further risk-recovery, as depicted by a positive mood across global equity markets and which tends to influence the precious metal's safe-haven demand, also did little to lend any support or ease the bearish pressure.
The market focus now turns to the Fed Chair Jerome Powell's scheduled speech, which along with the release of minutes from the latest FOMC meeting on Thursday will influence expectations over the pace of interest rate hikes beyond 2018 and eventually provide a fresh directional impetus.
In the meantime, the preliminary release (second estimate) of the US Q3 GDP growth figures, due later during the early North-American session, will be looked upon to grab some short-term trading opportunities.
Technical levels to watch
The 100-DMA, currently near the $1211 region, might continue to act as an immediate support, which if broken could accelerate the fall towards $1207-06 intermediate support en-route the key $1200 psychological mark.
On the flip side, any attempted recovery back beyond the $1216-17 region now seems to confront immediate resistance near the $1220 level, above which the recovery could get extended till the $1224-25 supply zone.