Gold took a breather after its recent upsurge and traded with minor losses on Wednesday, snapping three consecutive days of winning streak to near three week tops.
A modest US Dollar demand from multi-month lows was seen weighing on the dollar-denominated commodities - like gold. This coupled with a pickup in the US Treasury bond yields further dented demand for the non-yielding precious metal.
Moreover, a slight improvement in investors' appetite for riskier assets, as depicted by positive trading sentiment around European equity markets, did little to extend any support to traditional safe-haven assets and dragged the yellow metal to session lows near $1237 region.
Further downside, however, is likely to be limited amid fresh political jitters coming out of the world's largest economy and hence, any retracement back towards the very important 200-day SMA would now be looked upon as buying opportunity.
Technical levels to watch
Immediate support is pegged near $1235 level, below which the metal is likely to aim towards testing the 200-day SMA support near $1230 region. On the flip side, momentum above $1241-42 area now seems to confront resistance at 100-day SMA near $1247 region, above which a fresh bout of short-covering has the potential to continue boosting the commodity back towards $1257-58 strong horizontal hurdle.
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