Gold consolidates overnight steep decline to over 2-week lows

   •  Subdued USD demand/risk-off mood lends some support.
   •  Firming Fed rate hike expectations should limit strong gains. 

Gold extended its consolidative price action through the early European session on Wednesday and remained within striking distance of 2-1/2 week lows. 

With investors still digesting the new Fed Chair Jerome Powell's first congressional testimony, a subdued US Dollar price action was seen lending some support to dollar-denominated commodities - like gold. Adding to this, a weaker trading sentiment around global equity markets was further seen underpinning the precious metal's safe-haven appeal and supported a modest uptick. 

The rebound, however, lacked any strong conviction/follow-through move as investors now seemed convinced that the Fed might opt for a faster monetary policy tightening cycle, which might continue to keep a lid on any meaningful up-move for the non-yielding yellow metal. 

Traders now look forward to the second estimate of the US Q4 GDP growth numbers, which might infuse some volatility in the market and eventually provide some fresh trading impetus. 

Technical levels to watch

Immediate resistance is now pegged near $1323 level, above which a fresh bout of short-covering could lift the commodity back towards $1332 supply zone. On the flip side, sustained weakness below $1315 immediate support now seems to drag the metal towards the $1307-06 region (YTD low) en-route 100-day SMA support near the key $1300 round figure mark.