Gold sinks below $1300 handle to a fresh three-month low

Extending its slide for the sixth consecutive session, spot gold broke below 100-day SMA and $1300 mark important support and sank to over three-month low level of $1281. 

Currently hovering around $1284 level, off session low, Monday's release of US ISM manufacturing PMI seems to have revived hopes that the Fed would eventually go ahead and raise interest rates by the end of this year, which has been the key factor driving the greenback higher and weighing heavily on dollar-denominated commodities - like gold.

Meanwhile, buoyant sentiment surrounding global equity markets on easing jitters over the financial health of Deutsche Bank has failed to extend any support to the safe-haven appeal of the precious metal and halt the ongoing sharp slide. 

Later during US trading session, speeches from various Fed officials will be scrutinized in order to gauge the timing of next Fed rate-hike, while this week's key focus would remain on the US monthly jobs report, popularly known as NFP.

Technical outlook

Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers Ltd., notes, "The price currently rides on the third wave of five-wave descend from $1352, which exceeded its 100% Fibonacci Expansion at $1296 and could extend to $1278 (FE 138.2%), as another bearish signal was generated on break below $1295  (support line of bear-channel from $1375)."

"Bounce could be expected as Slow Stochastic is oversold and daily RSI is approaching negative territory. Corrective rallies should be ideally capped under former base at $1302/06, now reverted to strong resistance, to guard pivotal barrier at $1312 (daily cloud base)."

"Res: 1298; 1305; 1312; 1317
Sup: 1289; 1283; 1278; 1268"