Gold sits at over one-week lows, weighed down by positive US data
• Extends overnight bearish slide below 100-DMA.
• Mostly in-line US economic data adds to the downward pressure.
• Investors continue to track progress over the US tax reform bill.
Gold remained under some selling pressure through the early NA session and dropped to 1-1/2 week lows in the past hour.
The precious metal extended its slide for the second straight session and was further pressured by today's mostly in-line US economic releases. The incoming US macro data, including yesterday's upbeat GDP print, reaffirmed December Fed rate hike move and has been one of the key factors driving flows away from the non-yielding metal.
Meanwhile, a subdued action around the US Dollar now seems to be lending some support to the dollar-denominated commodity and might contribute towards limiting any deeper losses, at least for the time being.
Investors would continue to track progress over the long-awaited major US tax reform bill, as it moves toward a full Senate floor vote this week. The proposed measures are expected to boost inflation and force the Fed to opt for a steeper monetary policy tightening cycle through 2018, which should continue exerting downward pressure on the commodity.
Technical levels to watch
A follow-through weakness below $1275 support now seems to accelerate the downfall towards $1269 intermediate support en-route $1260 level (Oct. monthly lows).
On the upside, any recovery attempts beyond $1280 level now seem to confront fresh supply near the $1285-86 region (100-day SMA), which if cleared could lift the commodity back towards $1293-94 supply zone.