Signs of stability in the financial markets undermined demand for the safe-haven metal.
Break below the $1,800 accelerated the slide and has paved the way for further losses.Gold weakened further below the $1,800 mark and dropped to its lowest level since late January during the first half of the European session. Spot prices
Following an early uptick to the $1,818 region, the XAUUSD came under some renewed selling pressure on Monday and prolonged its recent bearish trajectory witnessed over the past one month or so. Modest recovery in the global risk sentiment – as depicted by signs of stability in the equity markets – turned out to be a key factor that undermined the safe-haven gold.
Apart from this, the prospects for a more aggressive policy tightening by the Fed further contributed to driving flows away from the non-yielding yellow metal. The intraday downfall took along some short-term trading stops placed near the $1,800 mark. This further aggravated the bearish pressure surrounding gold, though a combination of factors helped limit losses.
Mounting global growth concern resulting from the war in Ukraine and China’s zero-COVID-19 policy has spurred a rally in bonds, which saw the benchmark 10-year yields retreat from the recent peak of 3.20%. This, in turn, kept the US dollar bulls on the defensive and extended some support to the dollar-denominated commodity, allowing spot prices to rebound from the $1,787-$1,785 area.
That said, the lack of any strong follow-through buying and acceptance below the $1,800 round figure marks a bearish breakdown. Hence, a subsequent slide towards the $1,782-$1,780 area, or the 2022 low, en-route the next relevant support near the $1,753-$1,751 zone, remains a distinct possibility. Traders now look forward to the US Empire State Manufacturing Index for a fresh impetus.
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Gold rebounds from multi-month lows, holds above $1,800
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