Gold Weakens in Asian Session, Investors Take Profits
Global gold prices weakened in today's Asian trading session, after previously hitting a new record high. Pressure on the precious metal was primarily driven by investor profit-taking following strong US retail sales data overnight and market positioning ahead of key economic events in the coming days.
The weakening gold price is considered a reasonable short-term correction, considering that the previous strong rally had pushed prices into overbought territory. With relatively thinner market liquidity in the Asian session, even modest selling pressure was enough to push prices lower.
Fundamentally, gold's movement was also influenced by the US dollar, which tended to stabilize or even strengthen slightly at the start of trading. This condition reduced the attractiveness of dollar-denominated gold, thus suppressing short-term buying interest. Furthermore, persistently high US government bond yields have increased the opportunity cost of holding non-yielding gold.
The market is also tending to be cautious and adopting a wait-and-see approach ahead of the release of key US economic data, including inflation data and further statements from Federal Reserve officials. The lack of new catalysts during the Asian session has led market participants to focus more on securing profits than opening new positions.
Technically, gold is facing selling pressure at a psychological resistance area, following the price's failure to hold near its all-time high. Momentum indicators such as the Relative Strength Index (RSI) were previously in the overbought zone, so the current correction is seen as the market's attempt to normalize price movements.
On the intraday timeframe, gold prices are also showing a pattern of lower highs, indicating temporary weakness and opening up room for a decline towards the nearest support area. However, the medium-term bullish trend structure remains intact, as long as the price can hold above the key support zone.
Market participants are now awaiting further movement in the European and US sessions, which are expected to bring higher volume and a clearer price direction. If dollar pressure eases and global risk sentiment improves, gold has the potential to rediscover buying interest. Conversely, a strengthening dollar and rising bond yields could potentially extend the consolidation phase.
Overall, gold's weakness in today's Asian session reflects more of a technical correction and profit-taking, rather than a change in the direction of the main trend. Gold's prospects remain supported by medium-term fundamental factors, including global uncertainty and expectations of looser monetary policy going forward.
Source: Newsmaker.id
