Gold trades with modest losses, downside remains limited
- Gold witnessed a modest intraday pullback amid a pickup in the USD demand.
- The prevalent risk-off mood extended some support to the safe-haven metal.
- A sustained break below the $1800 mark is needed to confirm a bearish break.
Gold remained depressed through the early North American session, albeit has managed to recover a major part of its early losses to the $1800 neighbourhood.
The precious metal struggled to capitalize on this week's goodish bounce from the $1790 support area and witnessed a modest pullback on Thursday. A modest pickup in the US dollar demand was seen as one of the key factors exerting some pressure on the dollar-denominated commodity, albeit a combination of factors helped limit deeper losses.
Against the backdrop of the ever-increasing coronavirus cases globally, concerns about worsening US-China relation took its toll on the global risk sentiment. The global flight to safety was reinforced by a weaker tone surrounding the US Treasury bond yields, which extended some support to the non-yielding yellow metal.
Meanwhile, the USD struggled to preserve its early gains despite better-than-expected US macro releases and might further impressed bullish traders. This, in turn, makes it prudent to wait for a sustained break below the $1800 level before traders start positioning for any further intraday depreciating move.
The commodity was last seen hovering around the $1807-08 region. Some follow-through move up might continue to confront some resistance near the $1813-15 area, above which the momentum should lift the commodity beyond multi-year tops, around the $1818 level, towards testing the next major hurdle near the $1828-30 region.
Technical levels to watch