Gold extends overnight sharp retracement slide, now seems vulnerable

   •  Easing US-China trade war fears dampen safe-haven demand.
   •  A modest USD rebound adds to the downward pressure. 

Gold extended overnight sharp retracement slide from over 1-week tops and continued losing ground through the Asian session on Thursday.

A fresh wave of global risk-on mood, as depicted by a strong overnight recovery in the US equity markets and buoyant sentiment across Asian bourses, was seen as one of the key factors weighing heavily on the precious metal's safe-haven appeal. 

Adding to this, a modest US Dollar rebound, supported by easing US-China trade war fears, exerted some additional downward pressure on dollar-denominated commodities - like gold. Further collaborating to the downside was a goodish pickup in the US Treasury bond yields, which tends to drive flows away from the non-yielding yellow metal. 

The commodity is now inching closer to the lower end of its weekly trading range and a follow-through weakness, amid fading safe-haven demand, now looks a distinct possibility. Later during the early NA session, the usual initial weekly jobless claims data from the US would be looked upon for some short-term trading opportunities.

Technical levels to watch

A follow-through weakness below $1325-24 area might turn the commodity vulnerable to extend the downfall towards testing 100-day SMA support near the $1312 region. On the flip side, $1328-30 area now seems to act as an immediate hurdle, above which the metal could head back towards challenging $1340-41 supply zone.