Gold fades a bullish spike to fresh weekly tops, slides below $1725 level

• Gold retreats from weekly lows despite weaker risk sentiment, sliding US bond yields.
• A modest USD rebound exerted some pressure on the dollar-denominated commodity.
• Bears need to wait for a break below an ascending trend-line before placing fresh bets.

Gold struggled to capitalize on its intraday uptick to weekly tops and dropped to fresh session lows, below the $1725 level in the last hour.

A combination of supporting factors assisted the commodity to break through its daily consolidative trading range and build on the previous day's rebound from the $1712-13 region. Concerns about a surge in new coronavirus cases, coupled with geopolitical tensions in Asia continued weighing on investors' sentiment.

The cautious mood was evident from a weaker trading sentiment around the equity markets and benefitted the precious metal's safe-haven status. The anti-risk flow was reinforced by sliding US Treasury bond yields, which provided an additional boost to the non-yielding yellow metal and lifted it beyond the $1730 hurdle.

The uptick, however, lacked any strong follow-through, rather quickly lost steam ahead of the $1740 supply zone. A modest US dollar rebound from daily lows turned out to be one of the key factors that seemed to exert some pressure on the dollar-denominated commodity, though the downside seems limited, at least for now.

The commodity has managed to hold above a short-term ascending trend-line extending from monthly lows. This makes it prudent to wait for a sustained breakthrough the mentioned support, around the $1718-17 region, before positioning for any further near-term depreciating move.

Technical levels to watch