Gold off lows, still weaker around $1340 level

   •  Surging US bond yields prompts fresh selling.
   •  Renewed USD weakness helps limit downside.
   •  Reviving safe-haven demand lends additional support.

Gold maintained its offered tone through the early NA session and was now seen consolidating daily losses around the $1340 level. 

A hawkish Fed outlook, signalling at least three rate hike moves in 2018, triggered a fresh wave of an upsurge in the US Treasury bond yields and prompted fresh selling around the non-yielding yellow metal on Thursday. 

However, a combination of factors, including some renewed US Dollar weakness and a sharp selloff across European equity markets, helped limit any deeper losses. A weaker greenback underpins demand for the dollar-denominated commodities and risk-off environment tends to benefit the precious metal's safe-haven appeal. 

Meanwhile, the market seems to have largely ignored today's upbeat second-tier US economic data and the upcoming release of the US ISM manufacturing PMI might also fail to provide any meaningful impetus. Friday's keenly watched US monthly jobs data, popularly known as NFP, would now play a key role in determining the commodity's next leg of directional move.

Technical levels to watch

The $1337-36 region might continue to protect the immediate downside, which if broken is likely to accelerate the fall towards $1326 horizontal support en-route $1320 level. On the upside, $1345 level might continue to act as an immediate hurdle, which if cleared could trigger a short-covering bounce towards $1350 area ahead of Jan. daily closing highs resistance near the $1358 region.