Gold hits fresh 2018 low, RSI at lowest since December 2016

• Gold fell to $1,253 in Asia - the lowest level since December 18.
• The RSI fell below 30.00 to show oversold conditions.

Gold is likely losing its allure as a safe haven asset.   

The yellow metal fell to $1,253 in Asia - the lowest level since December 18 despite the rising odds of a full-blown trade war between the US and the rest of the world.

Gold is also a currency with limited supply and cannot be printed out of thin air. So, its decline is likely an indication that other paper currencies have little room to rally against the greenback.  

As of writing, gold is trading at $1,255 - down 8.1 percent from the April high of $1,365. The sharp sell-off has pushed the 14-day relative strength index (RSI) below 30.00 (into oversold territory).

Currently, the RSI is at the lowest level since December 2016. So, a minor corrective rally could be in the offing.

Gold Technical Levels

Resistance: $1,259.55 (session high), $1,272 (4H 50MA), $1,282 (May 21 low).

Support: $1,235 (50-month MA), $1,213 (May 2017 low), $1,200 (psychological level).