Gold struggling near yearly lows, remains vulnerable

   •  Renewed USD buying interest/positive equities prompt some fresh selling.
   •  A sudden fall in the US bond yields/oversold conditions limit further downside.
   •  Price action suggests that the near-term bearish slide might still be far from over.

After an initial uptick to $1295 area, gold started drifting lower and dropped to fresh yearly lows in the last hour.

A fresh wave of US Dollar buying interest since the early European session was seen prompting some fresh selling around dollar-denominated commodities - like gold. This coupled with a goodish recovery in the European equity markets dented the precious metal's safe-haven appeal and further collaborated to the latest leg of downfall. 

Meanwhile, a sudden retracement in the US Treasury bond yields did little to lend any support to the non-yielding yellow metal, with the USD price-dynamics and fading safe-haven demand acting as key determinants of the depreciating slide to the lowest level since late December. 

The commodity now seemed lacking strong bearish conviction, with near-term oversold technical conditions helping limit further downside, at least for the time being. However, the price action over the past two trading sessions, wherein the metal has failed to capitalize on early recovery attempts, clearly suggests that the near-term depreciating move might still far from over. 

Next on tap would be the second-tier US economic releases - the usual initial weekly jobless claims and Philly Fed Manufacturing Survey, which might be looked upon to grab some short-term trading opportunities.

Technical levels to watch

Sustained weakness below $1285 immediate support is likely to accelerate the slide further towards $1276-75 intermediate zone en-route a major support near the $1267-66 region. On the flip side, the $1295-97 region might continue to act as an immediate resistance, above which a bout of short-covering could lift the commodity beyond $1300 handle back towards 200-DMA support turned resistance near the $1306-07 region.