Gold back in red below $1150 amid resurgent USD strength

Gold failed to sustain early strength and ran through fresh offers near $1160 region, reversing all of its daily gains to drift back into negative territory.

Currently trading back below $1150 level, a fresh wave of strong greenback buying interest seems to be the only factor attracting fresh selling pressure around the precious metal. In fact, the overall US Dollar Index has now strengthened further beyond 103.00 mark, inching closer to recent 14-year high level, and weighing heavily on dollar-denominated commodities - like gold. 

A sudden spike in the US Treasury bond yields, on growing expectations of faster US economic growth and additional Fed rate-hike actions in 2017, is driving flows away from non-yielding yellow metal. Moreover, a mildly positive tone around European equities is also doing little to lend support to the metal's safe-haven investment appeal.

Going forward, US Dollar price-dynamics remains a key determinant for the metal's near-term trajectory and hence, investors will keep a close watch on this week's key event risk, US monthly jobs report, popularly known as NFP, due for release on Friday.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com, notes, "Now to take off any further downward pressure we really do need to make a break above 1165...Only if we can do this can we really start to look a little stronger...if we want to buy Gold we can as long as any stops are below 1115....we must be aware of the fact that unless 1115 breaks we have more potential med term to make a move higher...."