• Gold came under intense selling pressure during early European session on Monday and tumbled to fresh multi-week lows near $1235 region.
The latest leg of sharp fall over the past half an hour lacked any fundamental driver and could be attributed to a fresh leg of sharp up-surge in the US Treasury bond yields, which tends to weigh on the non-yielding precious metal.
Adding to this, possibilities of some big stops being triggered on a sustained break below $1250 level might have also collaborated to the yellow metal's sudden plunge to the lowest level since May 17.
The metal, however, seems to have found some buying interest near the very important 200-day SMA support and has quickly recovered around $10 from lower levels to currently trade around $1245 region.
It would now be interesting to see if the rebound is led by any genuine buying or was solely driver by some short-covering from an important support.
The 200-day SMA near $1236-35 region remains immediate strong support to defend, which if broken is likely to accelerate the slide towards $1228 support area. On the upside, any recovery beyond $1246-47 region now seems to confront resistance near $1250 level, above which a fresh bout of short-covering could lift the commodity back towards $1260 strong resistance.
• Gold prices edged lower on Monday as investors remained cautious ahead of a flurry of U.S. data due this week, with firmer Asian stocks also weighing on the market.
Spot gold fell 0.2 percent to $1,254.00 per ounce at 0515 GMT, staying not far off a one-week high hit on Friday.
• Investors will watch U.S. data including June consumer confidence, pending home sales, crude oil inventories and revised first quarter GDP for any signs of softness that could push back rate hike expectations.
• "The market is looking at this week with caution... There's certainly some expectations of disappointing data and also a more dovish Fed, that could keep gold prices elevated," ANZ analyst Daniel Hynes said. "Anything on the inflation front will be constantly watched."
• "We do not see much happening in gold this week and expect a continuation of a sideways slog as a trifecta of weaker oil, a stronger dollar and firmer U.S. equities all combine to keep gold rallies somewhat in check," said INTL FCStone analyst Edward Meir.
Fed chair Janet Yellen will be speaking on Tuesday and could provide the market with some direction, Meir added.
• Hedge funds and money managers slashed their net long position in COMEX gold for the second straight week in the week to June 20, and cut it slightly in silver, U.S. Commodity Futures Trading Commission data showed on Friday.
• Among other precious metals, silver was nearly flat at $16.69 per ounce.
Reference: Reuters, FxStreet
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