Gold hovers around six-week highs ahead of US GDP

Gold struggled for a firm direction and see-sawed between tepid gains/minor losses near six week tops as investors keenly awaited the advance release of US Q2 GDP print. 

Today's subdued action could be attributed to diverging moves between the US Treasury bond yields and the US Dollar. A goodish recovery in the US bond yields, which although has failed to assit the greenback to build on overnight strong recovery, was seen keeping a lid on any up-move for the non-yielding precious metal.

Even the prevalent risk-off environment, as depicted by weaker trading sentiment around European equity markets and which tends to benefit traditional safe-haven assets did little to provide any fresh impetus to the precious metal as investors preferred to remain on the sidelines ahead of the important macro data. 

Against the backdrop of Wednesday's FOMC statement, showing the central bank's readiness to continue with gradual monetary policy tightening cycle, stronger than expected US growth numbers would leave the Fed on track to raise rates further by the end of this year and push up the USD, which should eventually weigh on dollar-denominated commodities - like gold. 

   •  US: Q2 GDP growth to accelerate to an annualized 2.5% q/q - TDS

Technical levels to watch

Bulls would be eyeing for a clear break through $1265 resistance, above which a fresh bout of short-covering could lift the commodity back towards $1280 level with some intermediate hurdle near $1274-75 region. On the flip side, $1255 level now seems to have emerged as immediate support, which if broken could accelerate the slide back towards the very important 200-day SMA support near $1250-49 region.