Gold weaker below $1200 mark amid global risk-on trade

Gold extended its near-term corrective slide and traded with bearish bias for the third consecutive session, sliding further below $1200 handle.

Currently trading around $1196 region, the prevalent risk-on mood across global equity markets, with the Dow Jones Industrial Average crossing the key 20,000 psychological milestone, has been weighing on the precious metal’s safe-haven demand. 

The yellow metal moved farther from two month tops, touched earlier during the week, despite of persistent US Dollar weakness amid growing concerns over the US President Donald Trump's protectionist stance after he withdrew the US from TPP trade deal and vowed to renegotiate NAFTA with leaders of Canada and Mexico. However, resurgent US treasury bond yields seems to be driving flows away from the non-yielding assets and collaborating to the yellow metal’s ongoing corrective slide. 

In absence of any major market moving economic releases from the US, the metal remains at the mercy of treasury bond yields ahead of the US quarterly growth numbers, due for release on Friday.

Technical levels to watch

On a sustained weakness below $1195 level would turn the commodity vulnerable to head towards testing 50-day SMA support near $1176 region with some intermediate support near $1187 and $1180 levels.

On the flip side, any recovery back above $1200 handle now seems to confront strong resistance near $1205, which is closely followed by resistance near $1210 region, above which the metal seems all head back towards two-month high resistance near $1219-20 region.