Gold surrenders weekly gains, back closer to $1220 level

   •  Bulls fail to capitalize on the recent recovery move from over one-month lows.
   •  A goodish recovery in European equities dampens safe-haven demand.
   •  A modest USD rebound adds to the selling bias and contribute to the downfall.

Gold finally broke down of its Asian session consolidation phase and dropped back closer to the $12220 level in the last hour.

The commodity continued with its struggle to make it through $1230 immediate strong resistance, or over two-week tops, and now seems to have stalled its recent recovery move from over one-month lows, touched last Tuesday. 

The US Dollar selling pressure, triggered by speculations that the Fed might pause the rate hike cycle as early as spring 2019, now seems to have unabated on the last trading day of the week and was seen as one of the key factors weighing on the dollar-denominated commodity.

Adding to this, a goodish rebound in European equity markets, despite lingering trade war tensions and worries about global growth, dented the precious metal's safe-haven status and further collaborated to the ongoing slide through the early European trading session.

With bullish traders failing to capitalize on a combination of supporting factors, it would be safe to assume that the commodity might have already topped out in the near-term. Hence, a follow-through weakness, led by some fresh long-unwinding pressure, now looks a distinct possibility.

Technical levels to watch

Immediate support is pegged near the $1222-21 region and is followed by weekly lows, around the $1218 level, below which the commodity is likely to accelerate the slide further towards $1211 support zone.

On the flip side, the $1228-30 region might continue to act as a stiff resistance, which if cleared decisively should accelerate the momentum further towards $1234-35 supply zone.