Gold tumbles back closer to weekly lows

   •  Defies a modest USD weakness/sliding US bond yields and reviving safe-haven demand.
   •  Technical selling below 100-hour SMA plays a key role in dragging the metal lower. 

Gold extended overnight retracement slide from near one-month tops and continued weakening below the $1300 handle.

The latest leg of sharp fall lacked any obvious trigger and could be attributed to technical selling below 100-hour SMA, which was seen acting as an important support through the European trading session.

Meanwhile, a mildly softer tone around the US Dollar failed to revive demand for the dollar-denominated commodity, with the ongoing slide in the US Treasury bond yields also doing little to lend any support to the non-yielding yellow metal.

Traders also shrugged off escalating US-China trade tensions, especially after the US officially announced 25% tariff on $50 bln of Chinese imports, with technical selling playing a dominant role in exerting downward pressure on the commodity.

Even the prevalent weaker tone around equity markets, which tends to underpin traditional safe-haven assets, failed to stall the ongoing downfall back closer to weekly lows set on Wednesday.

From a technical perspective, yesterday's failure to decisively breakthrough the very important 200-day SMA hurdle and a subsequent slump clearly seem to suggest that the bearish trajectory might still be far from over. Hence, a follow-through weakness, possibly back towards YTD lows, now looks a distinct possibility.

Technical levels to watch

Immediate support is pegged near the $1290-89 region, below which the metal seems more likely to break below the $1286 intermediate support and test YTD lows support near the $1282 area.

On the upside, $1298-$1300 zone now seems to act as an immediate hurdle, which if cleared might assist the commodity to make a fresh attempt towards conquering 200-DMA barrier near the $1307-08 region.