Gold hangs closer to six-week lows, capped below $1250 level
Gold failed to build on early tepid up-move to session tops near $1248 level and has now drifted into negative territory for the second consecutive session.
The latest leg of retracement over the past hour or so, to session lows near $1243 region, could be attributed to a modest US Dollar recovery, which tends to weigh on dollar-denominated commodities, including gold.
Meanwhile, rising global bond yields, after major central banks hinted towards moving away from ultra-loose accommodative monetary policies, has also dampened demand for the non-yielding precious metal and has thus, failed to assist the commodity in registering any meaningful recovery from six-week lows touched at the beginning of this week.
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However, the prevalent risk-off environment, as depicted by intense selling pressure around global equity markets, was seen lending some support to the yellow metal's safe-haven appeal and seems to have collaborated towards limiting further sharp downside, at least for the time being.
Nevertheless, the metal still seems all set to register its third week of losses in the previous four and could also be on track for its lowest weekly close since mid-May.
Later during the NA session, the US economic docket would be looked upon for some fresh trading impetus, while the broader market risk sentiment would also play a key role in determining the commodity's move through European trading session.
Technical levels to watch
Bears would be eyeing for a follow through buying interest below $1240 immediate support, which if broken is likely to drag the metal back towards the very important 200-day SMA support near $1235 region.
On the upside, any recovery attempts might continue to confront some fresh supply near $1250 level, above which a fresh bout of short-covering has the potential to continue boosting the commodity even beyond $1253-55 intermediate resistance towards $1260 major hurdle.