Gold comes under pressure and drops to lows around $1,550/oz
- Gold loses further momentum and tests $1,550.
- USD-recovery weighs on the yellow metal.
- The ongoing risk-on sentiment puts the metal to the test.
The improved sentiment in the risk-associated space is now motivating the ounce troy of the precious metal to slip back to the $1,550 area, or daily lows.
Gold weighed down by USD, risk
The yellow metal is extending the choppy performance so far this week amidst the better mood in the riskier assets, particularly following the recent signing of the ‘Phase 1’ trade deal between China and the US.
Also adding to the ongoing pullback, the greenback has regained some buying interest on the back of above-estimates results from Retail Sales, the Philly index and Initial Claims, which have somewhat reversed the pessimism following December’s inflation figures (released earlier in the week).
However, occasional weakness in the metal could be seen as temporary in light of the expected US-China trade frictions under the future negotiations of the ‘Phase 2’ deal and unremitting geopolitical concerns mainly in the Middle East.
Gold key levels
As of writing Gold is losing 0.19% at $1,553.24 and faces the next support at $1,536.11 (low Jan.14) seconded by $1,514.10 (61.8% Fibo of the December-January rally) and finally $1,497.17 (100-day SMA). On the upside, a breakout of $1,574.21 (38.2% Fibo of the December-January rally) would expose $1,587.93 (high Jan.6) and then $1,611.34 (2020 high Jan.8).