Gold tumbles to lows, weakens farther below $1320 level

New York (Mar 12) Gold continued losing ground at the start of a new trading week and tumbled to fresh session lows, around $1315 in the past hour. 

Following an early European session breakdown below the post-NFP consolidation phase, a modest US Dollar rebound aggravated the selling pressure around dollar-denominated commodities - like gold. 

This coupled with strong gains across European equity markets was further seen denting the precious metal's safe-haven appeal and contributed to the sharp retracement slide over the past couple of hours. 

Moreover, possibilities of some short-term trading stops being triggered, on a decisive break below $1320 level, could also be one of the factors behind the commodity's downfall through the mid-European session. 

Meanwhile, a slowdown in the US wages growth now seems to have eased concerns of rising inflationary pressure and dampened the commodity's demand as a hedge against inflation. 

Even fading expectations over more aggressive Fed rate hikes in 2018 also did little to lend any support and stall the non-yielding yellow metal's downfall on Monday.

Technical levels to watch

A follow-through selling has the potential to continue dragging the commodity further towards $1312-11 intermediate zone en-route 100-day SMA support near the $1302 region. 

On the upside, $1320 level now seems to act as an immediate resistance, above which a bout of short-covering could lift the metal towards $1331-33 supply zone en-route $1340 strong hurdle.

FXstreet