Gold extends downslide after strong US economic data

Having reversed all of its early tepid recovery gains, gold turn lower and extended its weakness for the third consecutive session to touch a six-day low following the release of better-than-expected US economic data.

Currently trading around $1317 level, a stronger-than-expected US GDP growth during the second quarter of 2016, coupled with a lower-than-expected rise in weekly jobless claims, boosted the greenback across the board and attracted fresh selling pressure around the yellow metal. A stronger US Dollar tends to dent demand for dollar-denominated commodities - like gold. 

Moreover, the prevalent risk-on sentiment across global financial markets, led by Wednesday's agreement among OPEC members to cut oil production, is further denting demand for traditional safe-haven assets - like Yen and gold.

From technical perspective, the precious metal had broken down from a near-term consolidation phase and remains vulnerable to continue slide further in the near-term.

Technical levels to watch

On the downside, immediate support is pegged at $1310 region (100-day SMA), which if broken decisively would open room for additional depreciating move in the near-term initially towards $1305 horizontal support and eventually below $1300 mark towards $1290 strong support.

Meanwhile on the upside, $1325 level now becomes immediate resistance and even if the commodity manages to clear this immediate barrier, further up-move might now be capped at 50-day SMA near $1331-32 region.