After yesterday’s late rebound from weekly lows, gold prices slipped on Thursday and traded with bearish bias for the third trading session in previous four.
Recent hawkish rhetoric from various FOMC officials stoked market expectations for an imminent Fed rate-hike move at its meeting on March 14-15 and is evident from a fresh leg of up-move in the US treasury bond yields, which is eventually weighing on the non-yielding precious metal.
This coupled with persistent strength in the US Dollar is further denting demand for dollar-denominated commodities - like gold. Moreover, a strong rally in the US equity market is driving flows away from perceived safe-haven assets and collaborating to the precious metal's rejection move from the very important 200-day SMA, touched at the beginning of current trading week.
On Wednesday, however, the metal managed to rebound from lower levels, possibly indicating initiation of some fresh hedge positions in wake of the ongoing political uncertainty in the Euro-area, ahead of the critical French Presidential election.
Moving ahead, investors now eagerly await for the Fed Chair Janet Yellen's appearance on Friday, which might provide insights over the central bank's monetary policy path ahead of the meeting in two weeks.
Technical levels to watch
Immediate support on the downside is pegged near $1241-40 area, followed by $1237-35 zone (yesterday's low). Failure to hold these immediate support levels, would turn the commodity vulnerable to head back towards 100-day SMA support near $1215-13 region, with some intermediate support near $1225 level.
On the upside, $1250 level now seems to have emerged as immediate resistance, which if cleared could lift the metal back towards $1257-58 resistance area ahead of 200-day SMA strong hurdle near $1261-62 region.
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