Gold dropped on Thursday with the prevalent risk-on atmosphere making it difficult for the precious metal to find demand as a safe-haven. The lack of fresh headlines surrounding the US-China trade conflict and some upbeat earnings figures from large US corporations, such as retail giant Walmart, provided a boost to the market sentiment yesterday. The CBOE volatility index, Wall Street's fear gauge, dropped to its lowest level since early May to confirm the stronger risk-appetite. Furthermore, after slumping to its lowest level since late March, the 10-year US T-bond yield gained traction and was last seen adding more than 1% on the day. Supported by the upsurge in bond yields, the US Dollar index staged a decisive rebound and touched its highest level in two weeks, allowing the bearish pressure to remain intact.
Gold prices failed to keep the traction going and headed lower loosing 0.9% of its value breaking below the $1290 level. The price received support from the previous trend line presented on the chart and is now trading just below the $1288.35 resistance level. The next level we will be watching is the $1291.35 resistance level if bulls want to prevent loosing control.
Support: 1295.36 / 1291.35
Resistance: 1298.49 / 1300.91