Gold falls for third day in a row, weighed down by stronger USD

   •  USD recovery gains traction and prompts further selling.
   •  Rising US bond yields add to the downward pressure. 

Gold prices continued to slide for the third straight session on Tuesday and dropped to a four-day low level, around the $1340 region.

A combination of negative factors, ranging from a follow-through US Dollar buying interest and diminishing demand for safe-haven assets kept exerting downward pressure on the precious metal. 

The greenback has now started showing some signs of a meaningful bounce, after it fell to over three-year lows last week, and has been one of the key factors weighing on dollar-denominated commodities - like gold. 

Adding to this, a goodish pickup in the US Treasury bond yields, amid growing expectations that the Fed might opt for a tighter monetary policy tightening cycle in 2018, was further seen driving flows away from the non-yielding yellow metal. 

Meanwhile, the prevalent cautious sentiment around equity markets, with major global equity indices breaking their winning streak, did little to revive the commodity's safe-haven demand and stall the slide to near one-week lows. 

It, however, remains to be seen if the recent downfall points to the formation of a near-term top or is being utilized as a fresh buying opportunity, as a hedge against concerns over rising inflationary pressure in the US. 

Technical levels to watch

A follow-through selling pressure below $1338 level has the potential to drag the metal towards the $1331-30 region en-route $1326-27 horizontal support. On the upside, any recovery attempts might now confront immediate resistance near $1346 area and is followed by $1350 level, above which the commodity seems to head back towards testing $1358 supply zone.